Leveling Items

An excellent idea that I first encountered in 1st edition Earthdawn, and have used in other systems, is the idea of leveling items. Magic items whose bonuses scale to the level of the owner. For example, a 2nd edition D&D character gains the Blacksteel Sword. This sword has a bonus to hit and damage based on it's owners level:

Level          Bonus to hit and damage
1-4            +1
5-8            +2
9-12          +3
13-16        +4
17-20        +5

Or, in Dungeon Crawl Classics:

Level          Bonus to hit and damage
1-2             +1
3-4             +2
5-6             +3
7-8             +4
9-10           +5

At certain levels, a specific power could be unlocked, that gives flavor and theme to the item.

Blacksteel Sword special powers
Level 3          +1 to saves versus magic spells
Level 6          Spellcasters struck with the Blacksteel Sword must save vs Will (spells) at DC 10+CL, or forget one randomly determined spell.
Level 9          Once per day, the Blacksteel Sword can cast an anti-magic shell, that lasts for 1d6 turns.
And so on...

This gives characters a reason to hold onto an item instead of trading up, and allows the game master to have much less items floating around in the campaign world.