There's no reason not to enforce a bare minimum of gear. It's not like you can't easily obtain adequate gear from the vendors or anything, after all. Sure, NQ white items aren't great, but I'd rather be stuck with someone that has a full set of 115 NQ gear in the Vault than someone who's still half geared in lvl 40-50 random drops.

But I guess just kicking those players until they get the hint that it's unacceptable works too.