So here we go.
Why is it that I must become a member of the Nightingale in order to defeat Mercer Frey?
It is explained (by Karliah) that Mercer's kind of a badass, and you'll need all the help you can get.
Why was I given this crappy Nightingale outfit (To be honest with you I'm not overly impress by it) when I can simply go back at home in windhelm to fetch my dragon-boned armor when it comes to hardcoe battles? I am a fricken MAGE for goodness sakes; It has little value to me. If I had to wear light armor I would rather it be my arch mage robes!
How much of this game have you played? Is every other reward from every quest useful for your characters? No? Imagine that; variety. You mentioned dragonbone armor. I refer you to the piles of threads on what happens when you upgrade to higher-level armors; it renders much of what you're going to find useless. Personally I found Nightingale enchantments superior to everything else I found; I was a hybrid stealth/warrior who doesn't smith. You're "not impressed by it" because you have subjective opinions which classifies you as a being capable of free thought and preferences.
I completed the Mage's College questline on this character just to do it; I did not think to myself MAGIC IS STUPID and WHY DID YOU GIVE ME MAGE ROBES THESE ARE USELESS.
Now why do I need assistant from a Daedric Princess (Nocturnal) in order to defeat this little piss ant? I have successfully defeated the world eater, and I help win the civil war. I don't need this Daedric Princess help. I wish their was an option where you can avoid all of this unnecessary bullcrap.
K. Not everybody does the quests in the same order as you. The people expecting the game to adapt and personally cater to them for every conceivable character/build/gear/progression layout is silly. Also see my first response above (about Karliah).
You think you're getting the Skeleton Key back? [censored] I defeated this piss ant so it's mine! Go svck a pipe! Theirs no way you're taking my soul without a fight. Be prepared for the day that I come to kick your [censored] ass to whatever you go when you die.
So don't give it back?
There are alternative explanations to mine of course. Most of this thread is filled with (overly emotional) subjective opinions. I personally enjoyed the TG questline more than most others. I don't know what "simple answer" you want?