Some of this stuff has been suggested before. In my "Questius" trials, I've noted that items from quests tend to be mostly useless by the time you get them, even playing through the "story" as efficiently as reasonably possible.

On the whole, I don't mind individual quests having little to no reward per se, but the end of a "quest chain" should have a significant award that very few really do. Vanity items would be one approach. I was hoping that when they introduced rings that they would be available as "quest chain" rewards (bind on pickup) -- something to make questing really worthwhile that wouldn't be generally available to people who haven't completed the quests.