There are some good faction armors in the game, but the trouble is that current scripting in the system makes them goofy to use and messes with your reputation in all the wrong ways. It would be interesting to allow some crafting to take faction armors, paint/mod them, and claim them as your own. The derived armors wouldn't change your reputation, but allow you to wear them like normal. Also, on the flip side, with a bit more reworking the scripts in place you could make any armor into a disguise for an alter ego.

i agree the faction armor system is they have is broken.

my idea is to make disguise a perk based on charisma and speechcraft and toggleabe so that once you have the perk you can choose to pretend to be a member of that faction at any time.