I like the idea of item duration loss, with added repair functions. As you stated this would help boost the economy requiring both new items and someone skilled in repair to fix my item for me.
Additionally I really like the temporary stat/skill loss but I don't think it's enough on its own. I'd like to see both of these implemented. The only problem with this option I see is gankers on PVP as this would make it even easier for them to kill me again and again, assuming they can find me.