First, I would like to see weapons go through the same degradation as armor, along with indication flags, ie: the new sword, the sword, the worn sword, the broken sword.
Secondly, either I would like to see the 'new' flag removed, or have the non-flagged state and the 'new' state tag swapped, ie; the new helm, the helm, the used helm, the cracked helm, the destroyed helm.
+1 for the realism
If the armor repair skill can be made to work properly, then sure.