[Question] Demand for Items in the Long-term

Hey guys, I've played the last beta so I understand most the the in-game features. But what I'm struggling understanding is how item demand will not fall off huge in the future. If player 1 dies with his gear, and player 2 picks it up, player 2 will use or sell it. But this means the gear is not removed from the total supply of the game. If I understand this correctly, the only feature that helps sustain is the trashing of 1-2(maybe it was 1-3) items on death. Is that right or am I missing something?