i think that would solve both the limitations of the current mod system, solve the technical limitations of too many mods shown in the UI at one time, and still require decision making of the players.
Once the armor is masterworked you could pay like 10 Enhancement cores (for example) to reroll the element of the armor.
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This is probably a good idea, but if you are going to pay 10 cores for the privilege, then you should just be able to choose the element.