Translated to mmo, I find that many times I like the look of the lower level stuff far better then the "epic coolness" of the endgame gear. Take Rift for example. I played a mage and a rogue. The mage endgame gear had pieces that looked like demented cotton candy whirled around into a robe like shape. The rogues were little better. But with the appearance tab I could take older gear and slot it to override my horrendous apprentice to look more like a decently dressed adventuring mage. My Rogue got similar treatment and went from a bland generic assassin to wearing a red overcoat with blue jeans. Again more of how I think an actual person would dress.
TSW went a step further and just made your outfit customizable with no bearing on your stats. Not sure is ESO could get away with that, but having appearance tabs we can use for RP to quickly switch appearances without having to move gear would be great in my opinion. Even if you don't RP it would go a long way to get further customization of your characters.