I agree, town clothes are pointless right now with the way things are. I don’t think transmutation stones need to go anywhere though, just make it so only town clothes can be shown over the top of normal gear, but still require transmutation stones to change the actual gear appearance. Put check-boxes on the town clothes items (they already exist on the helmet and shoulders so it shouldn’t be difficult to implement), and that would fix 99% of the issues people have.
Just as an alternative that might be more likely to happen than the Costume Maker. A collectable vault for costumes would make a huge difference, at the moment town clothes will take up a huge amount of bank/bag space. I have no idea why it doesn’t already exist, one exists for mini’s, why not town clothes? It would also mean you could potentially equip town clothes from the collectible vault too, similar to crafting.