Sorry, but this is just one of those ideas that demands yet another plugin/addon/mod to the server. While the idea might be nice (yeah, I too would prefer avatar variety as opposed to seeing everyone run around in the same enchanted diamond armour) I don't like to respond to every nice idea by asking for yet another server modification. It's taxing the admins, it increases the probability of server instability and server upgrade issues, it positions the server further away from the vanilla experience (and thus, it makes it harder for new players to get familiar with the server).
That said, I'd love it if Mojang would allow players to visually customise their armour in some way. Maybe a bit like how we can customise shields by adding banners or like how leather can by dyed.