This feels really old school, which is a compliment. That said, WotC seems to be moving away from old school type rules.
I do think WotC is doing that highly inconsistently and it's mostly oriented around things the devs don't seem to like (e.g., gear). The game is still quite solidly showing its wargame roots and only has a few dipped toes in "new skool" rules here and there, not in a solid enough way to be core in the game. I don't know that this needs to be seen as particularly old skool, either.
Regardless, I do think they missed an opportunity here, and not just in an old skool vs. new skool way. Players
like getting loot and upgrading. I totally get and support the reason why they didn't want to make it
necessary or let things get out of control, as happened in 3.X and 4E but it's fun for one's PC to get better. The rules for medium and heavy armor illustrate how one could use non-magical gear this way very nicely. Most characters built to use medium armor will start off with the lesser versions but need to save up for either the breastplate or half plate. Ditto for heavy armor. So this is already part of the game.
Make the lowest tier (e.g., padded, hide, ring) the base, which starting characters may have but would graduate from quickly. Lots of weapons fall in this category, too: Clubs, sickles, spears, daggers, etc. Then have a few levels of upgrades that are purchasable from craftsmen of various sorts. Most of the better tier of weapons would do essentially one die better. Other ways to make this cool would be to allow for multiple damage types and weapon qualities For example, making some weapons do different types of damage (e.g., piercing or slashing, user's choice) and then making more use of resistances and vulnerabilities would give players some interesting choice points while allowing the player who doesn't want to make those choices the ability to simply default. A few other interesting qualities would also fit nicely. Again, this builds on things that already exist, such as light, finesse, etc. Some interesting ones might be things like "ignores shields" or "advantage on trip attacks", etc.
This kind of stuff could be kept optional to minimize complexity. I'm not saying this is completely trivial to manage, but it would be a lot easier than devising a fully functioning magic item crafting system. It keeps magic as magic and it allows PCs to feel like they're growing while keeping their abilities in reasonable check.