I'm not sure xur himself really needs a buff or all the stuff that you're suggesting, simply put because all he is, is the nines trash collector ( he says so himself).
so instead I think what should happen is in the next major update, we should be able to raid the Nine to get all the good stuff ( why have a broken down NLB when the good one might have burst fire) and maybe have a new faction from a person who wants to overthrow the nine.
These new items would be divine rather than exotic and although they are more powerful you would be unable to equip another exotic or divine (armour or weapon) piece of gear at a time e.g. You equip the divine LMG "Thundergod" you can not equip, your nothing manacles or suros regime etc.
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I do like the idea of another level of rarity but raiding the nines stores or stealing doesn't seem like a guardian thing to do.
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What if the Nine decided we were a danger to reality since we have killed 2 hive gods and so they try to wipe us out.