Talysman posted a nice bit about making adventures that deplete the gear of adventurers:
There is an idea there worth pursuing, but it's got some risk - players hate losing their stuff.
It's just stuff, right?
But is it?
Why do players hate losing their stuff so much?
I think there are a number of reasons.
Scarcity. How many vorpal blades, holy swords, staffs of power, magical suits of plate armor, and helms of brilliance are there? Not many in any given game. How many characters? Well, as many as you need, and you can swap this one for another.
If you make magic items rare, you have to expect people regard them as especially precious. If magic items are harder to come by than PCs, they are worth more than PCs. You can't just make up a new magic staff, but you can make up a new guy if this one dies.
Actual need. "+1 or better to hit." You can't live without this stuff, literally, in dungeons. You will lose, and you will die, if you don't have that stuff. So they're valuable in a real way.
It's part of the reward. Items, like levels (in D&D) or points (in GURPS) are earned through effective play. People don't like rewards to be clawed back. Once you have it, you feel like it's yours, and it is unpleasant to have it lost. Hard to gain, easy to lose - not fun.
There is no "Raise Dead" for items. Not for the good ones, generally. If a rust monster eats your +2 sword, it's gone. But physical damage up to and including death in fantasy games is often trivial to fix. In real life, you lose an arm and your car and no one cares about the car - it can be replaced. In a game, you lose an arm and a magic axe of slaying and everyone weeps for the axe. Why? The arm is an easy fix. It's trivial in some games. Even death is so easy to fix that AD&D gave rules for maximum number of times and system shock rolls to make it less trivial.
Some games allow for repairs - GURPS has the Repair spell. But they won't unerringly work, and they don't replace the magic in stuff. So lost items are usually really lost.
Players hate being handed an unavoidable loss. One thing about "a thief steals your stuff" or "the kobolds come take your armor after you take it off to wash off the icky slime" is that it's generally unavoidable. Generally, you don't have much choice. You're surprised by the rust monster, you're jumped by wights, you find out the thief stole you stuff once it's gone. No one likes that in the real world, and having it happen to your paper man doesn't make it more fun.
So when is it okay?
It's still fair to make them risk and lose stuff, but there are a few ways to make it fun that I can think of.
An unavoidable loss they could have avoided. - if they'd worded the wish better, if they'd not gone that one more room, if they hadn't tried to beat up that group of NPCs they clearly couldn't take, if they hadn't blocked themselves into that tight corner - that's fine. "It's us or our stuff, what do we do?" is a fair challenge, if the players got themselves into it. "Themselves" is the key. If it's a choice ("I can kill that dragon, but it'll cost me my staff of power." ". . . okay, do it.) it's a real dilemma and worth posing. They won't resent it unless you railroad them into it.
Forewarning. Attritive adventures are fine, too, if the players know it going in. If they're willing to take the risk, great. Maybe they'll risk loss of precious gear if they feel like they can gain more from it. Maybe they won't. But you need to make it a known choice. If they know they are risking what they have to gain still more, they'll probably take it. If it just get snapped away, they won't feel like they had a choice in the matter.
This is also why rules where items can run out of power or break with usage are okay - I know if I roll an 18 on my Broadsword skill roll in combat I could roll "Weapon Breaks" on the Critical Miss Table. I'm taking that chance, and I know it. If I know there are rust monsters and I foolishly keep my sword out instead of my club, well, my fault. Again, forewarning - if you can know it is there and prepare to lessen, mitigate, or eliminate the risk, you'll be fine when those preparations fail in the game.
Make the loss temporary. Remember the heated hallway in S2 White Plume Mountain? You might be sans gear for a little while, but it's not gone. It's a tough challenge, and I remember it fondly. "Teleported nude, no saving throw" stuff in S1 Tomb of Horrors? Yeah . . . not as funny unless you might be able to go get the stuff back, and if it's so hard you can't expect to accomplish it, it's the same as permanent loss in feeling.
Make things easier to replace. Anathema to many GMs, but you can make magic items easier to get. If there is only one Holy Avenger in the world, it's going to suck to lose it to a disenchanter or have a thief steal it (unless you can track it down and get it back). If they aren't gone forever, or they are but you can get more, you dial down the fun-killer factor greatly. Still annoying, but it's not as drastic.
So says me, who had a rust monster surprise attack the PCs. If they'd just not jumped into the doorway to get at that troll, maybe the dwarf wouldn't have lost so much armor and his crowbar to it. Not much resentment from "maybe I should have looked before I lept."