Not really, since they can use modular armor pieces like they did with the forge piece sets. Even then, they only have to account for a maximum of 16 players worth of possible permutations on screen at any given moment and they have texture streaming. It wouldn't be that big of a stretch to add tons of armor permutations because past a certain point it wont take any more memory at run time.
They could do it, which is the annoying part, since I still think they shouldn't. They could spend their time on things with a bigger impact.