That's a lot of colors. People will be running around like The Rock screaming, "Can you taste the rainbow!?!"
All silliness aside, bumping the stats up on equipment that is already listed as legendary seems a better fix. Then rare items will seem more appealing. Bind on pickup may also be a good idea. Then everybody won't be running around with the same items. It will also give people a reason to run the maps themselves since some items can only be acquired by that particular character.
Not to mention the brag factor. "I ran Alien Oasis a bazillion times just to get the Sniper's Probe of Legend."