I don't see the reason to lost anything when you win.
* There needs to be a money drain.
* You don't want too strong of a situation where "the winners keep on winning" because they gained everything while the losers lost everything.
So you can satisfy both of these points, I think, by having gear get destroyed -- just not all of it. If every battle results in 50% of the gear being destroyed and 50% recovered (or 75% lost and 25% recovered, or whatever) then you're losing money worldwide (which is necessary), and the winners get a perk, but it's not a HUGE perk that will let them steamroll the rest of the server.
The suggestions I had posted in the general strategus forum would solve this problem and seems like it would be something chadz could do on the web server.
Just snapshot the gear list before the battle, compare it to what's left after the battle and restore some percentage of the items that went missing.