Well, I think the purpose of the vendor is to help fill the couple equipment slots at any given point where you've just had no luck finding anything good. Like when you're level 32 carrying around those level 7 unique boots with cool stats but 3 armor and you're finally tired of getting your *** kicked. I think there should also be the possibility of occasionally finding a really good piece of gear but not better than the best stuff that drops off enemies. If the frequency of finding good items on a vendor is about equivalent to that of one dropping off an enemy, then vendor farming is just a more boring way to obtain loot while not earning XP.
An additional means of balancing this is to select 1-2 item types where you might find a really good version on a vendor and configure most other item types so that you have almost no chance of that.
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My AllSkins mod has 4 of them - to compensate the complete absence of them on the game.
