Sorry I missed your first post. The problem with item handles is that the system was not designed to reuse handles. Once the handles are generated (when crafting, or picking up a local item, which turns it into a global item), it doesn't matter if traders hang on to them, or not.
When the item generation system was first designed, the number of handles seemed to be practically unlimited, so there was no reason to make it overly complicated by reusing handles, etc. As development progressed, the game grew significantly (even then nobody hit the limit in the original release, until after the EE was out; the playtime was over 550 hours) and changes in the EE increased the demand for handles (more items being classified as global, rather than local). This resulted in the limit being reachable by a great deal of crafting/trading/looting, or leaving the game running and checking trading periodically.
