Loki Eliot has an article up titled: Exploring the future of my Avatars Shape.
The article is a good account of the problems and decisions we must handle when making full avatars and clothes. It is worth the time to read.
We have many considerations related to where the Second Life Avatar is going and how we will work with it. The Lindens see things in terms different from those we see. The Lindens are dealing with programming issues and development costs. Since they seldom make clothes and seldom are involved in fashion the priorities are lopsided toward the technical. Lindens may not change appearance/clothes for years.
Of course the majority of SL users have no idea of the technical complications. But, they are into fashion and may change their appearance several times per week, if not per day. So, the majority of users have priorities lopsided toward the aesthetic side.
It is going to be hard to come together on what avatar changes are needed and when we might get the changes. There is hope that the Facebook purchase of Oculus Rift and expected competition from a FB Virtual World will push the Lab.
What we do know is that for now designers are figuring out if they can make Fitted Mesh work. My personal opinion is Fitted Mesh is nice to have, but it has certainly made the learning curve for making Fitted Mesh clothes a much steeper climb. Also, I believe we have incomplete about the avatar and how it works. But, the Lindens have lost much of that knowledge too. So, until someone digs through the code and figures it out, we are stuck with what we have.