The problem with him i feel is that he gives the same loot that can be found from engrams. This kind of cheapens the excitement of finding something if you can just go ahead and buy it.
I think Xur needs his own loot table outside of what can be found out in the World of Destiny. Also I think the other part of the problem is just how small the variety of loot you can get is.
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He is meant to be mysterious, I think your right he should sell special exotics, And he should be random, Like time and everything