The issue is, that each class only has a couple of legendary armor sets to choose from. And 2 of them are hard to get (Trials + full Hive).
So everyone pretty much looks the same, just slightly different coloring.
Meanwhile we all of this blue gear lying around that looks really good - some of it way better than some of the legendary stuff.
It almost seems like a waste since you only wear those blue sets as intermediate stuff until you find something better while leveling up -- and then never again.
It would add more diversity and customizability.
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Okay, I agree with you there. The blues and greens are sometimes great looking, but you'd lose visual identification. I'd add the caveat that exotic armor can't be transmogged. The thing is, it seems like a lot of effort for very little payout. It'd be easier to allow us to swap armor on the fly. Like, one set for crucible and tower, and one set for sweaty crucible and PvE. You wouldn't lose any visual information with that way. I actually still wear my seraph warlock robes when I'm not taking things seriously. They dropped at 315.