Definately, DEFINATELY YES !!!
For a number of reasons :
1) 3E is BALANCED about the buying and upgradin of equipment. Its in the rules for a reason, you are EXPECTED to melt down stuff you dont want/use for stuff you do want.
For those DM's who NEVER allow magic to be bought, what do the PC's do with their gold ?
If you are giving out the correct amount of wealth , and tailored items because the players cant upgrade/buy, what do they do with old items they sell and the cash that the generate via looting and adventuring ? Your players must have hundreds of thousands of gold sitting about doing nothing because there is nothing to buy.
2) To defeat the evil Longswordism. Longsword are veryvery boring, but something like 75% of all magical weapons are swords of some decription.
Noone will inverst feats in spiked chain, or mercurial longswords, or axes, if they expect that they are wasted because the DM will only give out swords. This detracts from the game IMHO. Anything that railroads players is bad, convincing players that to get good weapons they have to take sword feats is railroading.
3) Because its fun.
Nothing is more fun than achieving a goal, even if it is just saving up for that +3 flaming,acid,icy bow.
Im NOT saying there should be a Magik's R Us store. But all the items ALREADY have a rating of how common/uncommon they are. Currently our group is in a high magic game, and its been a whole lot of fun having to make the right contacts in the right city to get the items we want, or to have the items we want made.
Sure we cant get everything we want, but by making the right friends we can get some of the things we want. You can build whole sub plots out of small things like "getting a new spell book because this one is full", and this helps build up individuals as well as the whole group. My current PC has spent alot of time making friends in the local mage guild, in game terms I can pretty much buy scrolls and potions at will, but the roleplaying that went into getting into the guild was a whole lot of fun.
Just my 2c but I think that as long as you have sensible item availability (Eg 4 people want +3 cloaks of resistance, but your contact can only get one.. what will you do ? ) , letting players be able to build their character as an individual, and not as some level 8 fighter who fell out a mould, can only improve the game.
Majere