Initially, like most of the other people posting here, I thought this idea was stupid, but flames are fully customisable and there isn't too much abuse (a few dicks make spammy flames sometimes but /opt particles 0 is alright for such times). I feel like this idea has potential if it focusses on modifying pre-existing items rather than creating new ones (since item creation is probably hard as hell). I don't know anything about item forging so I am not sure what sorts of customisations could be made (length, weight, fluidity/rigidity perhaps for stuff like hair?) but they would have to different for each item and have limitations to stop gigantic 3d items. This would mean that the item forgers would probably have to test which variables worked for each new item and this might not be worth it.
If flame forge style item customisation is a bad idea I think we should still consider being about to perhaps "upgrade" certain items with shiais to perhaps make a hat taller or longer or add wings to shoes and then adding more to make the wings bigger. Although again, this might be a lot of work for item forgers, I just thing it would be cool to have the option to make one of the cheaper shiai item dope as hell by pimping it out with upgrades. Perhaps people would only be able to see the next upgrade rather than all the variants of the item since this would add to the curiosity factor. It might even be a good idea for the next upgrade to not be shown so all the user would know was that the item would be made to look better. The description of the item would be changed (level 1, 2, 3... max).
I know this sounds like a lot of work for a small change but I honestly thing this change would be pretty massive. It's cool to have new items being released every so often but I think an upgrade system for all the items we have at the moment would be worth while.
Not sure if you would want to extend it to normal 3d items being upgraded by shiais.