In general, I would rather see
1) the total value of loot decrease a little more
2) the # of higher value loot items increase a little
3) the # of lower value loot items decrease significantly to make (1) and (2) possible.
Basically, a few more (but still rare) sweet helmets and 2 handed swords drop, but significantly less 'bend iron broadswords' and 'tattered commoner's shirts' or whatever.
(4), in the background, I'd rather see a little less $ from loot and a little more $ from passive sources, but that's more preference than a balance problem per se)
This scheme would make it more likely that cool usable 2H weapons, armor, etc. would drop in any given battle.
As it is, it's rarely interesting to even look at the loot contents; you just see the loot as an undifferentiated blob to be converted into a fat stack of $.