My theory is that when you have degradation instead of it breaking and becoming lost forever, have some sort of degradation where the weapon/armor etc becomes slightly less effective. (ie a dull sword chops for less than a sharp and shiny one) overall this is annoying though, and realistically this would happen very slowly (unless you decided to fight giant rocks with your sharp sword.) but you should make it so that if you have degradation you don't need to run back to a town every 20 minutes to repair, it should be something that you only need to repair something after having to go back into town 5+ times for other reasons. or you should be able to have 3-5 play sessions (assuming long play sessions) before you need to repair something. but you should be able to take your item to a smith of whatever variety you need and he should be able to fix it for a flat nominal(cheap) fee no matter what the quality or condition, unless it had 0 durability and was broken (but not destroyed) thus needing more repair. whatever you do don't have it so that a 'broken' weapon or item is lost forever, give the play the choice of taking the broken item in for repairs or being able to throw it away if he chooses.