But lets get back to the topic at hand. There is an MMO that comes to mind where gear was not destroyed and managed to have a successful economy and that MMO was Final Fantasy XI (FFXI). Final Fantasy XI had one of the best player-made economies one could play. Just about all gear and items were made by crafters with a few exceptions of gear being rare drops from rare monsters. But even the rare drops from rare monsters, for a time were trade-able and also helped grew the player economy.
Why did FFXI's crafting and economy thrive? Simple, you had to go through the market (other players) to receive gear and consumables. Crafters had a purpose, in fact crafters allowed players to hunt mobs and npcs by providing players with weapons, armor, food, ammo, and arrows. The equipment crafters provided allowed players to level up and progress their characters towards their ultimate goal.
Granted, FFXI did use a leveling system, a system I have written before that if an MMO uses a level system for character progression, then chances are crafting will not be useful in any meaningful way. However, FFXI is the exception to the rule. Unlike most of today's MMOs, the leveling process in FFXI could take several hours to a day to gain one or two levels and weeks to months to reach max level. Therefore, the slow leveling process allowed gear to have a much longer life span compared with today's MMORGs. Gear itemization had such a wide spread that it was not uncommon to have the best gear starting from level 17 all the way until level 65 or end game.
Since gear was never destroyed, one wonders how was the market economy able to keep demand high? Simple. They allowed the gear have a wide range of uses, many of the classes were capable of using the same gear to its full effectiveness. Not to mention none of the gear was BoP (Bind on Pickup) so even after using it a player could re-sale his gear to another player. However, there was a limited supply of gear as rare monsters did not always drop them and there were just enough crafters to supply market needs. Finally, FFXI had a huge consumables market. Products such as arrows, ammo, potions, and food were constantly consumed and needed to be replaced. I guess in a sense the consumables in FFXI were sort of like EvE Online's ship destruction which most certainly helped the economy grow as well.
But in the end, FFXI's economy thrived. Crafters were able to make money buying commodities off the auction house and used the items to make their products in order to sale their items back on the auction house for profits. Everything all tied together, resource farmers provided to crafters, crafters provided to the adventures, and adventures provided gold to crafters which in turn would provide gold to farmers. Yes, this was the MMO economic circle of life an element that many of today's MMOs are missing.