Because SE likes giving us options. Maybe.
I think "Town Gear" is a nice comprimise. When you're out of town, and in field, or dungeons, then your real gear should be on show.
It would be very harmful to immersion if everyone is running around in subligar, or level 1 gear while they're supposed to be raiding high level dungeons. Just like bunny hopping...
Yoshi said something to the extent that he wants players to be able to identify a player's power/level/class/etc visually. That is something that is lost if you have a costume system. (don't have link atm, but I think it was in an interview somewhere)
Though, I doubt that you'll find that reason "Good" enough to compete with:
"Because SE likes giving us options"
Lots of other games out there with vanity system if that's a deal-breaker though.
Lol, quit if you dont like it comments fail bad....
Anyways, the only thing that counters to my first post is telling someones power, which to me doesnt matter at all. Should just add vanity slots that adhere to class/job requirements. Add level requirements to it and it makes it better.