I think this is yet another moneysink with no real added value in IC terms, merely related to the OoC "economy" (whoever spends most time grinding?) and not affecting that one too heavily either.
The people who possess such items will only be encouraged to grind more, farm dungeons, etc. Rather than the whole purpose of customisation.. granting -more- choices and freedom to the RP, instead of restraining your customising based on different mechanics. A cost on appearance changing isn't bad, but I honestly don't get what a cost of a few thousand will add to the RP, at all. I think it's more a case of sticking to the original mechanics of the game for the sake of nostalgia or such?
But what if your character has lost a leg and hand? You're pretty much screwed over financially with every expensive armour you gain, being forced to convert it to a peg leg and hookhand for a few hundreds or thousands of coin. Or you can choose to either alter your RP in a convenient way purely to avoid the costs, but at the cost of the quality of your RP. Or you could grind your ass off in a likely very much OoC fashion (I say OoC fashion, because I can't imagine a character with a pegleg and a hookhand being that great of an adventurer.)
And lastly you could choose to stick to a cheap armour with far inferior stats, handicapping yourself in combat for RP's sake, even if you're in fact a powerful sorcerer who shouldn't have much lower stats due to the lack of a foot or hand.
It basicly comes down to the mechanics and most of the combat-related events on this server 9 out of 10 times being primarily OoC.
Unless in that 1 out of 10 times where you actually happen to be a rich adventurer who does earn thousands of fang and finds treasures to sell on a daily basis.