In all the responses here I still havn't really seen any specific answer to the question "What would it add to the game?".
There is some mentioning of increasing trading due to more demand for iron, as well as possibly recycling allowing for re-use.
For the clothing part the ability to repair based on proficiencies is mentioned, but nothing much else.
I don't think any of these things are very significant. In the long run it's risky to trust others with your stuff, or to be dependant. So eventually everyone is going to have the ability to do it themselves and we'd just be back at the status quo, it'd just take a bit longer with a little bit more work on maintenance.
In short, it still doesn't add much to the game and, imo, isn't worth the devs efford.
In most games decay serves as an item sink, to prevent their economies from degrading too quickly. Mostly in games where combat and PVE is the main focus. In a game based on crafting & permadeath PVP I see a lot less need for itemsinks. The recycling option alone would do the trick.