I started playing Arm several years ago and this thread has caused me to think back, and compare what we had then with what we have now.
Back then, the level of RP was pretty horrible compared to what we have now, IMO. There was also a lot more dying (PCs) and a lot more physical conflict. It was a struggle to survive as an independent, not because of a shortage of coin, but because it was very likely your (PC's) life would end at the hand of some other PC before too long. To live a long time was a remarkable IC and OOC feat. From memory, there was still a bit of metal stuff around, but a lot less silk and other luxury-type stuff. I can only remember one PC templar from my first several PCs, and no militia PCs ... the law in the cities was virtually all in the imms' hands.
Nowadays, the level of RP is good and the IC realism has improved a lot, but the game seems to have changed somehow. There seems to be a lot less dying and a lot less obvious conflict ... and I don't know if this is related, but there seems to be a lot more political manoeuvring and scheming. There are wagon loads more templar, noble, and militia PCs than there used to be. A lot more PCs seem to be in clans than there used to be, and it seems like people (PCs) are living a lot longer--and with less apparent trouble in doing so. There are a lot more luxury items around (silk clothing, jewellery, etc.).
Not in any particular order, but a few thoughts ...
(1) It's become a lot easier to survive and live a long time. Join a clan, don't be an idiot (i.e., don't get fired), and you're more or less set. Living a long time feels like a lot less of an achievement than it used to. Now, I'm not advocating that the imms load up a few thousand gith NPCs and set them loose, but a higher PC turnover would IMO help the game feel a lot more gritty (not sure if that overlaps with harsh, but if it does, so be it). One basic goal might be to make the independent life more attractive, not less attractive. Still make clan jobs attractive (IC realism), but keep restrictions (e.g., loyalty or death, and make it easier for clans to hunt down deserters unless said deserters truly live away from civilisation). The more people playing independents, the more people taking risks to get ahead in life, thus the more people possibly dying. That's not a completely thought-out line, just a brief idea.
(2) As a few other people have suggested, anyone in a job should be working to earn things, whether it be money, social recognition, cool equipment, or whatever. Maybe a noble House might issue more than one uniform item upon joining, but for every other clan, I think a cloak or some other obvious uniform item is enough. No one, unless they're nobles, templars, or other very high up ranks, should be walking around in a complete set of matching, logo-emblazoned gear. But I digress. IC work should have an IC effect ... at the moment, it feels (from what people are saying) like most PCs' work basically has little net effect on their clan's prosperity. When this happens, people (OOCly) start thinking "what's the point?" People (PCs) need to be working to earn what they get, to get that sense of achievement. At the moment, it seems like all you have to do is live (not do anything plain stupid), turn up to socially RP, and hold out your hand for the coins to flow in. But I have to stress, this is just the impression I get.
(3) Conflict. It's one of the basic tenets of the game, and yet it feels like it's decreased. It's more PC versus NPC now, than PC versus PC. Maybe one idea would be to decrease the number of hostile NPCs in the wilderness. This makes it safer for any PC to go out. This encourages PCs to become raiders. This leads to more PC versus PC conflict. Let the PCs enact the dangers, more than the NPCs. I've only just thought about this, but I like the sound of it, if I do say so myself.

(4) Last point: I think we should remember that PCs represent a spectrum of both IC and OOC (player) personalities and goals. We shouldn't restrict all noble House guards to a certain 'more gritty' form, just as we shouldn't restrict them to all being elite troopers. And I'd say the same for Byn-type mercenaries and most other groups. I think that the higher (socially) you go, the more homogeneous form should be, and the lower, the more heterogeneous (nobles are pretty much like each other, at least on the surface; independent mercenaries can span everything from the drunken slob who knows how to wield a sword to the serious soldier who just missed the cut on getting into a House).
So, to summarise:
(1) Make it harder to live longer, with the aim that more PC deaths makes the world feel grittier. To do this, encourage more PCs to be independent of clans, or at least make it a more viable/attractive option, without losing the desirability of joining a clan (for which there should be decent competition to get in, but it's not total utopia when you do get in--you still have to work for your living).
(2) Give players a sense of achievement in their IC work. What PCs have to do shouldn't be easy (though still feasible), so that the players feel like they've achieved something when their PCs finish some work. At the moment, it feels to me like PCs are largely unnecessary in the IC world.
(3) Encourage more PC to PC conflict (helping point 1 along) by actually
decreasing the danger/hostility of a lot of the wilderness. This would encourage and make it easier for PCs to themselves take up the 'antagonist' roles currently filled almost completely by the gith and friends. (Quick aside: what happened to all the raider clans? No need for them any more, maybe that's why.)
Just a few quick thoughts, and I freely admit I haven't read every other post in this thread carefully, so apologies if I've repeated something. Also, I should stress that a lot of what I'm saying is based on my personal 'feel' from reading posts and observation of general trends. I could well be completely out with some of what I'm thinking.

As always, all IMHO.
Swordsman