It would be nice if the Dwarves would pick up particularly nice pieces and claim them, then actually wear them if they were jewlery or earings.
And have them claim all the masterwork bone earrings that you were planning to use to buy dogs and booze? (This is seriously all I buy on some years. Dogs and booze. "What do you want next year?" "Eh, bring more dogs and booze." "...nothing else?" "Nope, we need mostly dogs and booze." "...are you having drunken dogfights in this fortress?" "Only when we've got nothing better to do, really.") I'm not against the idea in its entirety, but I think you need to account for the fact that dwarves picking out fancy earrings and such to wear would kind of put a great big dent in the available crafts you have for pawning off.
If we take into account the idea of the economy getting revived (I shudder to think of it...I started playing a good long while after Toady decided "Whoops, economy's fucked, let's put it on the backburner" and I've have to learn all things associated with it), then maybe there could be some new noble (or perhaps a few new duties for an existing one, the broker or the mayor of the tax collector perhaps) to regulate the claiming of items and crafts. For example, Urist McMiner's shirt is getting a bit ratty, so he wants to buy a new one. He goes to Urist McSomenoble and asks, "Can I buy that snazzy cave spider silk shirt that's in the stockpiles? The wind here's awful chilly on my nipples when I'm wearing this thing." Urist McSomenoble, after getting the image of Urist McMiner's nipples sticking out like little rosy jellybeans out of his mind, says "I'll get back to you on that" and puts up a chit for the "overseer" (you!). It'd go something like "Urist McMiner is suffering jellybeaning of the nipples and wants to buy that snazzy silk shirt in the stockpile". Then you could decide whether he can buy it ("Get those nipples outta sight!"), or not ("These gifts from Goblin Claus pay for your drunken dogfights, Urist. You can just keep wearing the one you have for a bit."). Perhaps depending on Urist McMiner's personality, he'd either sigh and go back to work, or say "Well, what about that less snazzy rope reed fiber one?". If that one is also denied him, this might give him a bad thought ("He was denied the aquistition of new clothing lately"), again based on his personality.
This would serve a few purposes. First of all, your dwarves wouldn't go just grabbing the first shirt they see when theirs get ratty, possibly denying you the sale of a particularly valuable item (one of the kids in my fort once claimed a GCS silk robe that was somewhere between 200-300 urists worth. I nearly ate my beard out of frustration). To make sure your dwarves do get clothed, you'd have to either bestow some of the less expensive clothes that Goblin Claus left in the chainsaw traps on them ("Cave fish leather cloak? Sure, buddy, go ahead..."), which would free up space, or make your own, which would stimulate the economy (but what about the communism? ;_;). Your dwarves get clothes, you sling the really expensive ones off on the caravans (for booze and dogs!), so everybody's happy!
Then there's nobles.
Nobles, of course, need clothes too. And it wouldn't do for the mayor, the baron, the duke or let alone the KING to be wearing just a cave fish leather cloak and a rope reed fiber cowl, would it? Hell no. So of course, when His Highness Urist McKing spots that fancy yellow zircon-encrusted giant cave spider silk robe that one of those stupid goblins wore to war instead of a dinner party hanging off of a serrated steel disc, he'll be like "Hey. I'm the king, here. That shit's mine. Booze and dogs are all well and good,
but I gotta look pimpin', damn it!" This may give players more incentive to fuck around with magma, if you know what I mean.
I do like the idea of dwarves starting fights over other people trying to touch their fancy stuff, though. Maybe there'd be dwarves with thieving streaks, so there'd be an actual use for justice and all that.