[quote=aj0413] It should though. Makes no sense why killing someone doesn't give me their stuff (is what they sell and wear). [/quote]
True, it isn't realistic. However, killing a shopkeeper for all of their equipment and skill books trivializes the importance of gold, and even finding items.
Also, should every guard we kill drop a full set of armor and weapons? That would be a lot of equipment we'd be looting after every fight. Should any of it be worth using, should it sell for much if we get so much of it? Pretty soon you'd be looting tons of garbage just so you could run it back to sell to a shopkeeper who you'd just kill to take all of their stuff anyway.
It's a balance decision. Getting a few items that actually have value as drops is far more interesting and engaging than a large amount of items that quickly become meaningless.
