So there’s going to be alignment-bound gear in Star Wars: The Old Republic, as well as ability that are unlocked depending on your alignment. In a single-player game I’d be absolutely fine with that, I’d even applaud it. (Though, frankly, there is often too little in the form of rewards for people who choose to take a middle road.) I think it’s a horrid idea for an MMO though.
There will be people who play SWTOR for the story and the universe alone, and those won’t really care about alignment gear. Then there will be die-hard optimizers who will simply pick the side with the best rewards for them and never look back. Then, however, there will be those who live in both worlds and this feature just has to be bad for them. With rewards dangling in front of you, you will be much more likely to choose the conversation options and general decisions that get you closer to those rewards instead of those that fit your character and your idea of how the story should progress.
There will also be peer pressure on those who choose a non-optimal path at least for those who are interested in end-game group play. (“What, you chose to follow romance as a Jedi? But that leads to the dark side; you can’t join our raid guild!”) Alignment decisions don’t seem like something you can simply change with a respect.
The only way around this issue I can see (that keeps alignment gear around) is to make all options equally worthwhile which in turn pretty much invalidates your choice. If it doesn’t matter whether you are on the light side, the dark side, or somewhere in between you simply won’t care about the “special” gear and skills that rewards you with.
I can somewhat see a cosmetic argument having merit, a light side character dressing differently from a dark side one. Then again, why wouldn’t you just offer various cosmetic clothing choices and be done with it? Is there something in the lore that would prevent a Sith from wearing Jedi clothing or vice versa?