First off, I have to tip my hat to Whemy who has been arguing very intelligently in this post - a very pleasant surprise!
Next I have to say that I agree with him 100% - keeping the number of decent weapons in circulation down is critical to the idea of the PS experience system.
I won\'t repeat the finer points of this arguement because they\'re well known by anyone who knows their stuff.
Instead I present for your approval the following analogy...
In Hollywood MANY people are trying to make it big and score hot acting jobs, however, only a SMALL percent of these people ever make it to the point where they can consider it \"profitable\" - instead they take on small parts in addition to their normal jobs for the shear love of what they do, in the small hope that they\'ll one day get lucky. So when someone says, \"Is acting profitable?\" the answer is really no, save for the exceptional few who have the right mixture of talent and luck.
This is what I imagine the adventurer in PS to be like and this is why it is key to make good weapons hard to come by - everyone who tries their hand at adventuring cannot succeed (or at least succeed with ease) if it is too easy it is not fun for anyone - this is universally true.
Another note is that although peasants would have things like knives and axes they would be TREASURED items even though they were of little value. Losing a key tool like your ax or knife would be a major loss in medieval times and could even prove fatal.