I don't think anything is wrong with adding "realism" features, such as a durability system, but it should never interfere with having fun. There must be some way to automate whatever player behavior is necessary to quell the needs of such features or they become an annoyance system. 95% of the time this happens with encumbrance, durability, hunger, thirst, ect.
If the problem is too much money, you can't appeal to the players that they need to pay an equipment tax and do an annoying checking and micromanaging activity and expect widespread approval. Some people like that, but some really hate that (like me).
Encumbrance should only affect items that are currently worn and can be actively used (such as a backup weapon or alternate armor). This limits it to a strategic consideration only. Loot in the form of items to be sold or stashed should be managed both efficiently and without going anywhere. The pet in the torchlight games was good, but magic faeries that instantly do it for you are better.
Some people think what I call annoyance systems make the game more immersive, but I find I can just imagine tasks like selling items and repairing weapons were done with far more satisfaction than pressing buttons and sifting menus for hours of my recreation time. But I am all for giving people the option to do so if they want.