I like the concept. I was thinking, though, that we could further improve the system by changing how the equips are obtained and crafted.
*We could make people guess at the recipes like in Minecraft, instead of having the recipes spoon-fed to them. It would definitely make the crafting itself more interesting.
*Assign some equips to drop from certain enemies. Jelly armor only drops from jelly cubes, kat hats only drop from kats, Sealed Swords only drop from zombies, and so forth.
*Change the acquisition method between equips. The vortex bombs can only be obtained by collecting a rare "artifact" in some places around the Clockworks; the Sealed Swords must be "unsealed" before they can be used in crafting; and such like.
My ideas are rather complicated, though. Yours are simpler, if perhaps a bit unrealistic, what with enemies dropping recipes and all.
Reserved