Challenge games

Here's the thing - loot frenzy is fundamental to an equipment based game. Diablo and all its clones proved that loot is a mechanic that can be foundational to a game successfully. A good loot system can feed the gambling urge, creating addicts to your game - developing veterans into word-of-mouth advertisers.

To have a loot system in place that is weak, or even worse, a system of loot drops that can only very rarely outperform what you make yourself, is a serious disservice to the game, and your business model.

As for overpowering things . . . how often do you see weapon drops that you can't build, and aren't common on enemy ships? I almost always see only one per game, and have at most obtained two - the shield-drain laser, and the celestial ion cannon - the gold orb shooting thingy. And every time, I use them for novelty, because energy cannons and projectile cannons outperform them.