There should be a purpose for different equipment; the progression shouldn't be completely linear. Granted, there are obviously going to be "better" and "worse" items, with the only advantage of the "worse" item being cost, but there should be a viable reason to wear lighter or less protective armor for the mobility, weight, upkeep cost, or long-term durability. Some armor should be designed for specific terrain, or for use against a specific adversary's equipment because of their long-term animosity. When everything is a linear progression, there's no point in playing any other way than "go for the best", and then everything else in the game just becomes clutter.
As said, when everything is "uber", nothing is. Too many mods try to make the game "better" by boosting everything up to "elite" stats, which effectively removes any progression in difficulty. One "popular" mod started me out with heavy chain mail and a heavy axe (hilariously, my character was supposed to be a poacher), and nearly all of the bandits were wearing either chain or plate armor, yet the armorers were selling the usual padded armor, leather caps, and other items that were of zero use to anyone in the mod. Once you get the "good stuff" in such an inflated game, there's nowhere to go but down, and you still have more than half of the campaign to play out. The M&B game developers clearly understood that, and I hope they still do, rather than listen to the players who want bigger numbers on everything because it somehow makes them feel like they're better at the game. Sometimes, the worst thing a developer can do is take the player comments seriously.