This is the best solution I've heard so far.
Maybe you could get the upgrade materials from deconstructing the current Raid gear?
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That could work, yeah. Like, maybe you can only update older raid helmets via newer raid helmets, chest pieces with chest pieces, etc.. That way, if Bungie decides to make a certain armor slot harder to fill (like VoG helmets being HM only), that can still be enforced. However, if this system was to be adopted, I would hope that the upgrading weapons would be more streamlined- primaries for primaries, secondaries for secondaries, heavies for heavies, not necessarily the EXACT same weapon type. :P