The equipment you get from this quest varies greatly in their use, and for a 1-time thing it could either be incredibly good or completely useless for your character. A couple of the things are pretty much worthless as it is, only on rare occasions would anyone ever wear the armor it can give and it is limited to certain races, while a couple of the other equips are far superior.
I think either just let you choose which one you get, or buff up the armor drops from it.
It's supposed to be random what you get, sometimes it's good other times it's not.
Fine as it is imo.
No. The nature of the quest is such that the randomized rewards are appropriate, and removing that aspect (getting something 'good' or 'bad' from this old soldier's junk and memorabilia) would sort of take away from that in a big way.