Since this thread has been brought up again, I should like to thank whoever raised the loot rates in the arena. I am not certain all the rates, generally, have been revisited, the trepor pod near Ojaveda seemed unchanged last I looked but it has been a few days, at least, since I gave them a try, but otherwise it seems much better.
I think Gillis, that you may have misread something as I see no suggestion of loot rate based on LW skill.
As you get more accomplished in your armor training you can start to make a q300 boot and glove worth around 2000 tria from one medium hide with material left over so in that case you could pay up to 1000 or more for the hide and still turn a nice profit.
That said until the quality gets up you might not.
I suppose the reason people want to charge more for similarly sized hides from different sources is that the npcs do. Personally it wouldn't matter to me where it came from I can only make the same amount off of any medium hide so its value does not change from the source. However, I have not looked to see if there is some difference in the quality of the resultant leather. should I discover that there is a difference, akin to how diseased rat hides produce poor quality hides, I would factor that into what I would pay. If there is such a difference it must be pretty subtle as I have not noticed it.