First let me say that I heavily favor "real" looking armor, if I see armor with electricity arcing between gigantic spikes on the shoulders a part of me will die inside.
That said, "real" armor doesn't really come in Tiers. Yes there is leather/chain/plate etc. but the difference between a decent set of leathers and the best ever made would barely qualify as a second tier (let alone a third or fourth) though this would make for useful variation among Tier 1 armor. Fortunately in this world there's magic!
Every class can tap into their Soul Power to one extent or another, my suggestion would be that higher tier armors have Enhancements that are "powered" by their users. Like any good system though there need to be limits, the first limit would be the power of the source, a level 1 adventurer could not power an epic Enhancement and an epic adventurer would be unable to force any more power into a basic Enhancement (I think overpower/burnout effects could be cool too). This has a number of interesting possibilities, first if the player put on the armor anyway, there could be no Enhancement at all, and it would behave as basic armor. Second, you get some of the Enhancement effect but not all, this would allow lucky players that aquired high-level armor to wear it without breaking the challenge of playing the game. Third, they get the full enhancement effect but the character would be drained, becoming unable to use some or all of his other abilities, possibly even being detrimental to his base stats. This limit could also explain the rarity of epic items. Since only the most powerful would be able to use them there would also be little demand, even a Master Craftsman's time would be better served making lower power items since he would actually be able to sell them. Epic items would only be made on a specific comission, or for pride of workmanship in their spare time.
The second limit I would propose would be one on the what the magic can do, regardless of power. Enhancement magic would be just that, it would enhance what is already there. Steel is strong, durable, an edge could be described as sharp, but it is not light, fast, agile. One could put a "light" Enhacement on steel, but the effect would either be negligible or the power required would be ridiculous. Leather on the other hand is certainly durable (though not as much as steel) but it is light, and flexible, the animal it came from could be swift and agile and so it would take those Enhancements (Though it could never take a strength/durability Enhancement as well as steel).
WIzard robes would be the most difficult to explain from a lore standpoint, the best I can do at the moment would be that they don't take enhancements themselves but enhance other nearby things and are tied to metaphysical similarities (red robes enhance fire magic, feathers air magic, bones death) rather than physical ones. This is the idea I'm least confident about but I'm sure someone can think of something.
The best part of this is that it allows you to keep a character concept throughout the game. You picked leather armor because it is light, flexible yet decent protection, and those are the very qualities that the magic enhances, even the ragged hide armor of the barbarian could have been enhanced by an ancient and wise shaman of your tribe and the effect would be just as strong. It also provides interesting crafting options, since the 8 Int Barbarian would only really have to learn variations on "Strong, Stronger, Strongest!!" to stamp all over his gear in the blood of his massacred foes, the Wizard would have to master a dozen subtle shades of the hundred or more Enhancements to be painstakingly embroidered in gold thread on his Robes of Arcane Magnificence.
Hopefully some or all of this sounds good to someone at Obsidian, though I'm confident whatever they decide to do will be great. As long as it looks like armor
Seriously though, no glowing armor.