I perfer option 1 as well ... spend some attribute points on your starting equipment. However, I think you should be able to equip your sovereign with items and equipment you find and research as the game goes on. IE, the Sov should have one of those "character sheets" that shows all potions, rings, necklace, pieces of armor, robes, cape, ect. This would have your stats in a lower left hand corner, and here you can pick different equipment, ect for your sovereign to wear. you could also reforge your weapons/armor in a different material to make it stronger, or in a different glaze to give it a better/nicer color-aesthetic. Not sure how to handle the upgrade of your sovereign's equipment ... so I say that it should either be completely free (as long as its available, your sovereign can wear it) ... or a small, small gold fee to upgrade your equipment. PersonallyI think "FREE" since the Sov is everything and YOU own the resources, but alas ... some people might want to signify building each piece of equipment, so they might prefer the abstract gold cost, yet personally I think equipping the Sov should be free upon availability.
So yes, I feel that if a Sovereign Wants to wear full plate mail, and a Broadword +2, he should damn well spend Sov points on it ... cause he is "really lucky" to happen to be wearing all that bling at the time of the cataclysm, and know how to maintain it proper (already owned it, and knew what to do with it). Probably certain equipment should only be available to certain origins/professions. Like Adventurers, Warlords, and Royalty can wear heavy arms, and only Hunters, Bards, ect can use quick boots and Yithril Bows.
Anyways, I think requiring certain equipment with Origin would NOT be worth it, however I think it SHOULD cost Sov points to start off with an Uber Sovereign, and it should be free to upgrade him later (if you wait for the tech).
// Now then, things need to be some-what balanced. Assymetric balance, and lack of Patterns is what you need. it is Asymmetry that makes SP games great, not necessarily "imbalance". At least for Sandbox mode. Campaigns can be as imbalanced as they have to be, and rightly so, as its a different type of game. Sandbox and MP, however, need Asymmetrical balance in order to be successful. Patterns are boring, and Unbalanced is boring too because there is only one valid choice- only one valid strategy.