Seriously?
Now, it's been awhile, but I seem to recall what's-her-name stating quite clearly, that you wont get a new Thieves Guild armor if you loose the old one... That should be kinda a clue. Flagging every other item as a quest item is just lame, what's the point of having an inventory, if you can't drop or sell what you're carrying? I've got a ton of quest items just taking up space... What ever happened to the free market?
She doesn't say that at all. Someone actually has her quoted verbatim earlier in the thread (EDIT: That might actually be in the thread in the Xbox forum but whatevers ...). Basically she tells you to "put it to good use" and that's pretty much a direct quote.
She never ever says you won't get another one. Try again.
EDIT: The real issue is that a single piece of insignificant, weakly enchanted armor should not hold you up from progressing the questline. The other issue is that it doesn't make you fail the quest, it just breaks the questline. If you FAILED for selling it, I would be all with you guys on this. As it stands it is a DEVELOPER ERROR and it has been confirmed as such.
TRY AGAIN
EDIT 2: BTW: I've never sold mine and I've completed the TG twice.