If your focus is to improve the population of the game, then why try to implement a plan to run off the majority of todays player base?
What I don't understand, is how so many players in this game have bank accounts full of gold? I've played off and on for years dating back to pre tram, pub 16, and aos. I've quit a couple of times or took long breaks. I've got the gold I have thru brokers, and selling the few EM event items I collected. With out the EM events, or those of you selling millions of gold. I'd never be able to afford artifacts, powerscrolls, runic kits, etc.
So if you want to make comparisons of todays game, to that of the past, you need to consider the fact that armor and weapons all have mods, and all cost millions of gold. Compared to that of armor with no mods, and silver vanq weapons that dropped as loot on most high end monsters. Lets see anyone could obtain armor or weapons for next to nothing, i mean what was the most expensive armor back then? Valorite Platemail? And that would cost what 5-10k? That didn't take to much to replace, infact you didn't even need it, as most pvpers ran around on horseback naked or wearing a deathrobe.
You can't compare item breakage from the "good ol days" to the current state of the game. Just because a few of you can go drop millions at the drop of a hat when your armor breaks or gets lost doesn't mean everyone could. Infact with out item insurance all pvpers would leave their good gear at home in fear of losing it upon death. And you can say you wouldn't but I know how it was, I played a thief in those days, and other than an occasional boat key or regs, wasn't much worth stealing then either.
On top of that as already stated, item breakage would't return your crafters to their glory days, as most people have 6-7 character slots, and have their own crafters that they would turn too. I do currently sell armor and weapons, and I don't sell much of it, but i'm not the one crying for item breakage. So until these items you want to break can be easily replaced, then I see no point. And easily replaced, means for everyone!!! Not just the few eliteist with millions of gold, that was probably duped back in the good old days.