I am so very late to this discussion, but I wanted to place my thoughts here.
Durability in general can be a good addition to add immersion to a setting, as well as add a bit of a sink. But it's a very fine edged sword. On one hand, you don't want it expensive enough to become a barricade to play, on the other hand, if it's too cheap it's only purpose seems to be to make sure you hit an extra button at a vendor.
Whether or not an item decays to the point of permanent breakage being good greatly depends on the kind of game and how easy it is to reach the power ceiling. Minecraft if often looked at as a very casual game, and things break forever. Some people play Warcraft in a very hardcore way, and gear does not break forever.
I love classic Firefall, but admit permanent breakage was something that made me hesitant try and get higher tiers of equipment. It didn't stop me, but I was hesitant. And when I had the equipment, I rarely if ever equipped it because when the groups were large enough, I could run into purple difficulty missions and still contribute.
Attaining better equipment needs to feel rewarding, but higher tier materials needs to continue to have a use once the majority of the playerbase has it.
An idea I've always kept in the back of my mind, is the idea of short term and long term maintenance on items. If we assumed max tier is 5 in this example, a tier 5 weapon should always be more beneficial than a tier 4 weapon, but that doesn't mean the player is finished spending tier 5 resources on weapons.
In terms of short term maintenance, through use (and perhaps through death), durability of the weapon goes down. As the durability falls through thresholds, the weapon falls to a lower tier. Getting your weapon repaired will of course fill durability and have the weapon working at max tier again. This could be accomplished with either basic currency through NPCs, or perhaps through the crafting system for basic materials. The point is, this is cheap. Unless you've put yourself broke through other activities, one should never worry about whether or not these repairs can be afforded.
Long term maintenance is different however. At a much slower rate (perhaps one tenth or less), max durability lowers as well. Even after repairs, your weapon doesn't stay tier 5 as long, or perhaps can only be repaired to tier 4. This will be the more expensive repair, with materials matching the tier that's trying to be re-obtained. If this theoretical tier 5 weapons looses all it's max durability and is now tier 0, it should be cheaper to repair back to tier 5 than to obtain a new weapon. From 0-max should perhaps cost somewhere in the 70% range of resources of what the item took to craft from scratch, which would be much much cheaper for someone keeping on top of it. For someone who plays every day, this should perhaps be aimed at something needed to be done every week. While not cheap, this is not meant to be expensive. Unless the player is suiciding into a brick wall, this should be readily obtainable by the average player either through their own farming, or buying resources from others. The point is that this keeps the economy moving without stopping the player to look for rare materials every play session.
The weapon never fully breaks, getting a better weapon is always beneficial, you don't need high end materials on hand at all times, but there is still reason to search for or buy them. You never fall out of need of good materials, and hopefully manages to keep an economy spinning.
Perhaps the wall of text was too long, but I hope the idea is clear enough.