It would be interesting to see shops not restocking, or only for certain items (like skillbooks and some ingredients). The prisoner merchants would only sell items 1 through 3 or 4, later shops items 5-8 or so. Naturally they'd need a much greater selection of items from the start and a guarantee of every weapon type and armor type appearing at least a couple times. Also there'd have to be a sufficient penalty for equipping gear higher than your level (currently there is none for armor, though using high level weapons mean you miss a lot, which is probably enough of a deterrent.)
There's a number of issues with this still. Shops would have to sell a lot of items and it might be a little overwhelming. Losing the ability to wait around for new items to appear means niche builds that depend on certain equipment could be a bit screwed. Bartering would be a lot less useful, though maybe it could have some additional effects like increasing the number of items that merchants have available depending on your bartering level. More placed items throughout the game and merchants stocking a lot more unique items would help guarantee that no one is without passable gear
I'm not sure if it's worth the hassle, ultimately, just to make merchants feel a bit more realistic, but it's still be interesting to see.
