In any case I think there should be more than in PS1, otherwise the vendors you visit what would they sell? 
Another thing of Loren is that because how it was designed the weapons would have low impact on the attack damage, lower than they should have. They were still useful for elemental attacks though. Armors instead were essential to survive battles at Hard level.
Back to the topic, my solution would be so that the manual generated items would be marked "Unique", maybe with a yellow color of the name (as they do in Diablo/Torchlight), while the others would use different colors and would be rare but not unique. This way, if you like to play with this style you can just look for the unique items, but for everyone else there are also the "other items".
Anyway I need also to see how will design the items in Loren 2. In first Loren there weren't items with effects (though it was possible with the engine) or percentage based bonus (so that they would be always useful).
) where you can have basically the same base item with randomized properties. I think this way should be a good compromise, there are still unique items, but every time you play you could get also new random items.