Item Binding feels wrong..

[Sephrick]

It's to help the economy.

Essentially every item becomes a consumable product.

In games where items are sellable after being worn, the profit potential for that item diminishes severely as used versions are relisted and the potential buyer base lessens due to people either out-leveling the item or already having one.

In the materia system, players are encouraged to acquire new versions of the same item, and since used versions can't be resold, only crafters can supply to meet the demand.

A good example is XI.

The economy in that game grew stagnant after a while. The only profitable gear was high-end HQ and exorbitantly so. This created a barrier to entry for crafting.

Much of the economy hinged on ninjutsu tools, ammunition, food and sneak oils and invisibility powders.

XIV's system allows for a wider array of potentially profitable items.