I think it's an excellent idea for what you are trying to do. Despite what you say about it not working with the current edition, I think it's a very easy house rule to implement. All you need to do is give the DMG's inherent bonuses to the player, and have any item bonuses to attack/AC/defenses/etc stack with the inherent bonuses.
You would also want to account for the gold distribution, as the PCs will no longer need gold to spent on purchasing and upgrading magical items (and won't be able to do so). Obviously, the magic item parcels also need to go away. One benefit of this system is that characters are more likely to make use of alchemical items and potions that require daily item uses, to make up for the lack of permanent items that do so.
I have to disagree with others that the proposal will break the 4e math. Quite frankly, you will often have one character whose attacks, defenses, or AC are 1 or 2 points higher than another characters with the current system. All it takes is one PC getting a +2 weapon/armor/amulet while any other PC's is non-magical, or one PC getting +3 while another PC has only a +1 of that type. That happens in my campaign all the time, and it's never been a problem and seldom been an issue (there was a tiny window with the Plate+Shield user having an AC much higher than the rest of the party, but most that was the plate and shield rather than the magic). I would recommend limiting numerical bonuses to +1, though, to avoid opening too wide a gap and to make the items awesome for their powers rather than the numerical abilities.
I think it sounds like a fairly good idea, myself, and I might try it out in a future campaign to see how it works in practice.