Excessive loot? You're talking about weapons and armor. That's the thing that breaks the economy. Various garbage tin cans and what not don't because they're worthless, smaller valuables and consumables don't because, while their weight-to-value ratio is great, their absolute value is not, and there tends to be a limited amount of them (amount which you can fine tune if you want to actually reward the player with them). The issue is simple enough: the gear the player uses will, sooner rather than later, be pretty expensive, as that's the primary thing where all the player money goes. To stay competitive, the enemies also need expensive armor and weapons. When player overcomes them and loots all that, he can sell it for lots of money (because it's expensive).
So what's the solution? One is to tank the ratio at which vendors buy shit from you, but that affects ALL the items, not just expensive armors, which means armors and weapons will STILL be the main money source, the player will just need to loot more of them. Not a good solution [-5]. Another is to simply not award enemy weapons and armor. This is fair in some games, but others (ones that want to have every kind of stupid garbage lootable) would suffer from this arbitrary limitation [0]. Another could be making the armor and weapons cheap, which would solve this issue, but then there's two problems: one, it makes no sense from the setting standpoint for good armor to be worth as much as a loaf of bread, two, it means the player can, too, buy that shit from traders for cheap, which ruins his progression. Not a good solution either [-5]. How about having even shitty armor and weapons be competitive with high end ones, then? Even a dagger made out of copper could harm one in steel plate, which means you could have enemies wear cheap shit while the player is still buying his gear for lots of shinies. This isn't a bad solution, through it means there's going less of a power gap between the equipment – switching from bronze to iron won't feel like a leap in power, but more like a lame +10% to damage kind of thing, which makes for a very boring kind of progression [+3].
So what would be a good solution? Some of the approaches described could be combined. For example, armor you scavenge from dead enemies can be in terrible repair – because you destroyed it in order to kill them. A steel breastplate in mint condition is worth a small fortune. The same breastplate with a big hole in the middle is scrap metal, and even if the player was able to fix it up, doing so would cost so much that the profit would be negligible (but it could be worth it to him to repair that one unique set of armor to use himself, for example). An elegant [+10] solution to the armor problem.
With weapon, it's a bit trickier. While even a weapon in disrepair could be dangerous, it only makes sense for them to be in such a state when handled by bandits and the like, not enemies the player meets later in the game, such as elite knights and the like, and it's unlikely every weapon would get so damaged in a duel with you alone (especially if you kill the enemy from afar). However, the price of a weapon should, in general, be a lot lower than the price of armor (given the much lower amounts of material needed, as well as less time to forge it), and with the early game nerf in the form of shitty bandits having their weapons in disrepair, shouldn't throw a mid and later game economy out of whack – after all, by then, the player SHOULD be making a bit more money than before. But that's kind of avoiding the core issue there – if the enemy needs a strong sword to harm the player, and you have the player slaughter 20 of them in a single dungeon, it's still loot bonanza. And calls into question just how could all those enemies afford swords of adamantium or whatever. The answer in that case lies in assymetry. Have the enemy leader have a cool sword, by all means, but his underlings can make do with some cheaper variants, that are then souped up a bit so as to stay competitive – have them poisoned or specially sharpened to give them a temporary buff that will probably only last for that one encounter, and won't give a reason for the sword to skyrocket in value – after all, how much more valuable is it really if it turns into your ordinary run of the mill iron shortsword after the next two swings? This means that while the player still can make a profit from weapons, they will significantly lag behind the price of his own gear, and offer a much slower price progression than usual in these games. While not perfect, it is a good solution. [+5].