I’d suggest to add a function to upgrade hero items. It should be an ability of the Throne Room, similar to the ability of the Troop Academy to upgrade troops, or the Wizard’s Tower for spells: upgrade only one item at a time, and upgrade cost in gold. Upgradeability of an item is limited by the hero level!
Item upgrade should increase the item level itself, and bring the base stats of the item to that next item level. Already applied perks on an item should remain.
The reason is, that I hate to melt down or sell items, which would be on one hand very useful, but on the other hand are outdated from their level. And I also think that it would be quite profitable for Flaregames, as I believe if there would have been a way to level up items in the past, I’d kept more items (= more inventory slots bought) and started earlier to buy items in pro shop (= more incentive to play pro league for lower hero levels).