Since it really doesn't belong on the Leaving for WoW like we care thread... ;)
Repair kits need to work they way they do in SWG. The economy relies heavily upon it. Otherwise you'd only ever buy one set of armor for life and then Composite Armor would sell for about five million a piece lol.
I've been playing online games since Ultima Online was brand new and the only one. In UO only armorsmiths can repair armor and they get XP for doing it too. However Master Armorsmiths have almost no chance of destroying it. As such no one lets anyone but a Master touch their armor. Another side effect is that you see the same armor rotting on the vendors forever since everyone already has armor and has no need to ever buy more. Weapons in that game work the same way.
In FFXI Online armor and weapons work very different. They never get damaged and the game is level based so you upgrade your weapons/armor at various levels. Selling your old perfectly like new armor on the bazaar. Again no armor or weapons actually get made since the bazaar is flooded with perfectly good used ones.
It's nice in SWG that they actually thought about the crafters in the design and how they could make a living. Granted sometimes they go too far like customization kits needed so often but they fixed that.
Ask a Tailor about clothing once. Tailored goods in SWG work just the rest EXCEPT they have no protection so you can wear it at 1/1 or 0/1. As such tailors are hard to find since they never really sell anything again. Armorsmiths rely on them since some parts of armor can only be made by them and when they leave it really hurts the armor prices.
When all that is considered the system really works quite well.
Also don't let your weapons and armor get beat up so much. It appears the greater the damage the more likely it is to get blown up repairing. I repair a lot of armor since a lot of people think it works better for Master Armorsmiths which it don't. I can't remember ever seeing armor that was less than about 33% damaged blow up. 100/33000 and it almost always blows up.
Lastly you always can get the FS repair skill for +20 repair if you really care that much.