People keep talking about seeing people with armours 20 ranks above their level. You should remember the optimal level had a limit of -5 levels, if my memory is right (or make it so). Beyond -5 you received no bonus at all (but still wouldn't go naked!). So, obviously you won't see people running with level 50 armours while they are themselves rank 20 or 30. However, you'll see people wearing the armours only 1~5 levels below! Which is absolutely not terrible, just very practical! We already need to buy armours every 5 to 10 levels, the only difference is we'll be able to wear them sooner.

optimal level for me, keep the required level for rare drops and NM loot. 75~90% of the items should be optimal level with favoured class, while 10~25% of the items (rare loot) should be required level and required class.