I suppose I should have more thoroughly considered the proposal before posting. The degradation rate isn't so much my problem, as the lack of a reliable repair means. Currently adventurers have to possess the necessary repair items, then find a sage to conduct the repairs. Without the items there are no repairs, and I believe that when repaired UIs are not necessarily fully repaired.
Like I said in my original post, I'd like to see the option for repairs to be possible by gold alone(surely some NPC freemen have acquired, and sold, countless wolf pelts, eagle talons, and shiny medallions). Have the repair costs dependent upon the condition of the item, the amount of prestige it confers, and have the chance that a repair fails causing additional damage to the item. Adventurers would still be need to conduct the repairs(Nobles not wishing to be associated with sages).
For item turnover rate, make it possible to lose items in battle. Infiltrators, or captors, could steal a valued item. Even allow a Judge to accept a UI as ransom. I don't know how difficult it would be to code, but it could be interesting. I could certainly see the theft of some treasure being a reason for war.