First of all, I disagree. I think a large enough difference in skill would more than make up for a gear disadvantage, and it would be really shitty for the game if all the blood sweat and tears put into pve farming and grinding went to waste on arguably it's most meaningful endgame proving ground. PvP gives you something to think about, plan around, and focus on; it's a complete and total game changer and incredible motivation to actually keep playing the game. The replay value it adds cannot be understated, and this game's meta seems like it could be a hell of a lot of fun to navigate.
That said, I understand the concerns. Balancing would be trouble to say the least, people don't want the PvE to be effected by PvP balance changes (Sloth still needs to be nerfed into the dirt without a doubt regardless of the hell it will be PvP), and it would be an accessibility problem for casual players to be getting matched against these over stacked monsters. I think the easiest thing to do is just have a gear score where you tally up all the + values on equipment and then put it into brackets, it is not difficult to find decent divines or get good rolls on gear so I'm sure the upgrade level would be the biggest concern. If you want to raise the alarm on twinks intentionally using underlevelled gear to smash scrubs, well go ahead I suppose- but they don't have any tangible, statistical advantages at that point so I don't think it's a problem at all. The endgame is literally all about creating the best gear possible, if you want to whine that you're getting beat because your stats aren't good enough then I don't know what you think you're doing in PvE. The last thing I want however, is the highest level play to be compromised because of these concerns.
This is where the idea comes in- in writing this whole post I've thoroughly talked myself out of my own idea to be honest, but I still think it's a neat concept to have a street fighter character select. Maybe some kind of alternate mode with pre-selected stats, weapons, equipment, spirits, skills, etc. I think it would be neat to have a little mini fighting game inside the actual game.