Well, I don't know how to put it any more simply. You're looking at it from a weird view. The system as is assigns 'hotkeys' to items as they are inserted into the inventory. This makes it so you can, theoretically, memorize the key of the item as you pick it up and use it quickly from that point onward.
What this does in practice is it muddles up the entirety of your inventory as items are listed by category.
So: You pick up a weapon after you pick up all sorts of tools and food, and the weapon is assigned a random, unwieldy capitol letter while it somehow takes the top spot on your inventory.
It should list the inventory as you see it, with your items listed as 'a, b, c' and so forth. It's really, really not complicated at all. The number assignments are for equipped items only. Not inventory.
There is no 'searching' involved in the Cataclysm inventory, it is categorized and easy to find the types of items you are looking for. The only searching I ever do is to find out what the fuck letter an item is using at the moment I'm trying to use it.
It's the limit on the amount of items you can have because of this silly system of having hotkeys assigned and determined on pickup [which, therefore, makes it so you can only have 54 items in your inventory since you cannot 'choose' anything other than those letters]. You should list the items on the screen and that's it. a-z to pick something on the page.
The issue is the fact that letter assignments to items are so random as to be rendered useless [not to mention them changing all the time anyways], and the fact that this also makes it so you can't hold more than 54 items for a system that happens to be so unwieldy and cumbersome. If your team want to keep it like that, it's fine, but it's definitely not an attractive or useful system and even as an experienced player of Cataclysm [and cumbersome Roguelikes in general!] I find it infringes upon my enjoyment of the game as a whole, I dunno. I mean, I consider myself a die-hard of this genre and it bothers me how the inventory works.