There were a couple of reasons that removing the armor was the preferable course of action.
First, one of the design decisions made for this server was to do the best we could to make this server just like every other server, meaning that we didn’t have to maintain two separate sets of data (one for progression servers and one for normal servers).
Scaling back the rewards on progression servers only would have required that we create and maintain a separate set of data for these servers, which isn’t something we were interested in doing. Scaling back the rewards for all servers was also not something we were interested in, due to the fact that it would negatively impact every other server in the game.
Second, this server had limited resources devoted to it, consisting of one (sometimes two) designers and one programmer, who had to design, refactor, and implement the entirety of the systems needed to make this server operate.
We had to design and implement the trigger mechanism used to determine when an event has been completed. We had to modify the existing code that handles how expansions are processed to allow us to turn specific expansions on and off at any given time, and without having to bring the servers down. We had to design and implement the logistics on how and when the expansions, the tutorial, and the veteran rewards would be made available to the players.
We also had to sift through seven years worth of EverQuest data, evaluating it for imbalancing item drops, quest rewards, and tradeskill products, which is a rather daunting task.
As you can see, time also became a consideration, and the time needed to create new items appropriate for the combine servers, replace the old newbie armor with the new items, have it tested, and then get it out to Beta for tuning was far greater than disabling the NPC’s that give them out.