I have been playing around with the editor as well and, while I am no expert, I believe that the equipable armors are distinctly different than the armor models that can be assigned to NPCs. The armor models that can be assigned are race specific and do not have a model for when they are dropped on the ground (specifically because they are the default body parts of the NPC). I like the paladin armor, myself, but don't know how to set up an item that would reference those armor models.
