The issue is not that you lose powerful gear, the issue is you don't have access to other powerful gear if you decide to go evil
That’s part of the problem. Most evil options are very unrewarding long term and short term. Losing Last Light Inn either to Dark Urge content or evil content is Terrible.
You lose one of the best merchants, side quests, npcs and unique items. It's a Terrible design choice.
And I hope devs read these forums because Dark Urge rewards compared to what we get by playing any other origin, assuming a good/neutral guy just straight out SUUUUCK.