This is a bad argument unless you are playing a game with no skill gap. Whats going to distinguish you from other people in an online game is how good or bad you are.
Cosmetics matter very little, looking good matters very little, having these cosmetics on how you want to look matters very little. If they mattered at all, whales wouldnt be an extremely small percentage of the user base of every game with cosmetic microtransactions. They might matter to you but to pretty much every other player who is playing a game with cosmetic MTs they are a complete luxury and not necessary and the numbers prove this.
It also has nothing to do with ethics but it is a blessing. Most gamers simply do not want real life money involved with the playing field and the ones they do are the ones spending the money. If some idiot feels bad when their character looks normal and wants to drop a ton of money on cosmetics that isnt going to affect the gameplay. Unless they are like you and think looking special actually matters.
I agree with your general sentiment towards MTs and such but the basis for your arguments simply arent very good.
The basis is rooted in truth. In an MMO like World of Warcraft you have cosmetic "elite" sets that offer no statistical advantages for PVPers but are there to show some prestige due to the different colour scheme they have for that season. Then there are games with things like titles, colours, outfits, any manner of cosmetic, non gameplay altering or swaying elements that are to show off than anything. Shit, even in a game like Diablo II people would show off extremely rare uniques like Tyrael's Might or The Grandfather. There are better armour/weapons than those but you show them off for bragging rights.
That shit matters to gamers because that shit matters to people in reality when it comes to historical collection, fashion, novels, etc. Showing off is something a kid with Yu-Gi-Oh cards will do as a woman with Chanel will do and is something a gamer with cosmetic proof of some perceived grandness will do.
Which is why these cosmetics in games should be brought to reflect someone's time devoted or skill in actually playing and not in the money further spent. Having, I don't know, a captain's hat should be something of status via in-game achievement criteria being met and not shelling out $20.
Having status and having ways to show off in games, especially multiplayer ones, is a great thing. It's fucking awful when it becomes locked behind a paywall, especially when a decade ago it would've been something you simply unlocked.
yes people will show off what they got but gamers have shown time and time again it isnt important enough to them to open up their wallets to do so.
I agree completely with your sentiment and the system is a shitty system. I simply disagree with this specific argument ---