Use gear scaling, but make gear wield-able at different levels.
For example, when you start you can wear 2-trait craftable items and gear from the starter zones. As you progress you'd encounter gear that's wearable at level 10, 20, 30, 40... CP160. Once equipped it scales along with your character. There is no logical reason why my divines necropotence gloves should be less powerful as my character gets stronger. Each set would have a level where it is capable of being worn. ZOS could even get creative and have some sets that can only be worn at something other than straight character level (e.g. fighters guild 8, completing a specific achievement, etc).
This makes the earlier character levels more fun, since it's not just a grind to CP160. You'd have a lot more incentive to gold out a set you like before the cap.
This fixes the problem of regrinding/recrafting/upgrading your existing gear if ZOS increases the cap. This also solves the problem of a level 1 walking around with a malestrom staff and BiS trial gear; just make those wield-able at the appropriate level.
If ZOS wants to raise the cap, they just scale everything up to the new cap. They could also introduce new gear that's only wieldable at CP200/CP300 without any objections.
XBox/NA GT: Pizzaow