It is sad to think that someone went to all the trouble of designing these vendors and populating their their inventories only for them to never be used. I would love to see some changes which made them a more significant part of the game. Here are some thoughts:
1. Give vendors decent equipment to sell. A few strategies could be employed in order to prevent this from unbalancing the game: Make the prices high. Put Vendors who sell good stuff in dangerous hard to reach locations. Perhaps use a barter system where vendors require rare materials in order to make good stuff. Maybe just carefully choose the quality of vendor stuff at each level to be better than quest loot from lower levels but worse than quest loot for this level. That way vendor items could be used a temporary stopgaps until you obtained better quest rewards.
2. Enforce more rigid restrictions on repairing. Perhaps equipment could only be repaired to 100% by a vendor who specialises in that area. Other vendors might only be able to offer a 75% repair. You could expand on this In order to 100% repair teal and purple items perhaps you need to go to an expert in one of the major settlements. And please - healers and provisioners shouldn't be able to repair anything. In small outposts with only one vendor call them a "handyman" or something similar and let them do partial repairs.
3. Slightly more radical but intriguing - what if vendors worked like real life brokers buying and selling stuff from players. Guild Wars implements such a system very well with its commodity traders. It might canabalise business from the AH but it might be an interesting addition to the game economy.