People need to understand the cost of some items in a game -- in ANY game -- are not always in relative scale that matches real life.
If people are allowed to get their hands on a t6 armor with 50~60 body protection at level 2 after just 1 hour of following tournament and selling a few prize horses, what's the point of every other arms and armor in the game?
As it stands, expensive arms and armor natural become a symbol of player progression, and the player's overall status in the world. When at lower levels with lacking funds, you're forced to make do with whatever you can get your hands on at a bargain price. But if the player becomes a powerful lord with high regular income, winning large battles with tons of loot to bring in big bucks, then he's at the luxury to buy expensive armor. That's just how it is, and I don't see anything particularly wrong with this.
No matter how one tries to disguise it, in the end these complaints about item prices comes down to "I want to use the best equipment, when my character in this world has not made enough efforts to justify the ownership of such equipment."
People want bigger rewards with smaller effort, and that's really not good for the game.
If people want to throw that concept of balance out the window and just have everything easy-peasy, there's a solution called "mods." That's what such mods and cheats are for. Use them.
There is no point of every other arms and armor really. Just like that people always use the overpowered troops instead of the crappy ones.
If you think this is okay, then everything is okay.
In my opinion, players should be able to afford a good armor for winning a few tournaments. The tournaments are hosted by lords in major cities should give good rewards. Don't you think the champion of a city deserve a good armor ? The problem is that the tournaments are too easy. I don't know why a fresh player have any chance to beat a warlord.
Yes, the symbol of player progression can be expensive arms and armor, for example, a luxury scepter or robe socketed with expensive gems look more reasonable, and they can properly show the wealth and power of the player. I don't know how you did not see anything wrong with a plate armor which cost around the price of 300 elite knights, and those knights are using the same tier of gears as you do.
The combat gears should never be too hard to get because you can always strip killed soldiers. However, a rookie should not be able to use high tier gears due to low proficiency. There are plenty of ways to balance the game. Making the overall price of gears insanely high is very irresponsible.
Edit: Economy should focus on expendable solders and their equipment, maybe consumables too, not player items. You can see that players will use the top tier equipment forever and they will make more money eventually. This is not an ideal money sink. Soldiers will die in battle and you need to hire, train and buy equipment that can be a better way to consume money. Knight need warhorse to upgrade. Every other soldier can have a new requirement for upgrading. Isn't it a better idea?