Are heirloom items bad for MMOs?

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In its Wrath of the Lich King expansion, World of Warcraft introduced a new class of items: the heirloom. Heirlooms can be transferred between all of the characters on your account, even your alts belonging to "enemy" factions. While a cloth-bedecked caster can't exactly wear the heavy platemail of his older Paladin brother, the hand-me-downs are pretty useful for twinking if you plan it out a bit.

The trouble is that heirlooms effectively level up with the player, so an alt who has a truckload of heirlooms has no need to take part in the player market. Why would he need to buy a crafted staff from a Weaponsmith? He's got one that he can use for 80 (85, now) levels. And in that case, why bother crafting as a lowbie Weaponsmith at all?

What do you think -- do the conveniences of heirloom items outweigh their negative impact on MMO economies?

TH