I quite like that idea
Right now, in KBAP, money is a thing to stockpile or waste on runes or crystals. Still, with neatness lvl 3, you can buy any lvl 1-5 item and break it up. Keeping in mind that a rune costs 100k upwards, getting an item for 50k and breaking it for 2 runes is quite a bargain, isn't it? The same is with crystals. Why giving 10k upwards for a crystal when you can buy an item that costs 20k, break it, and get 5 of those?
Being able to purchase titles (that would increase the leadership value of a hero), castles (with race-specific units as you say), being able to smith items at a serious price (as you said) will greatly add to the game's content and will bring it even closer to perfection. There is no fun in finishing the game with something like 3 million gold on impossible and wondering why did you go to so much trouble to pile up something you will hardly use.
EDIT: That actually works pretty well with the basic idea I had. If the next KB will be about getting a decent hero to marry Amelie, what better hero than someone with an imposing title, a few castles and a big treasury? Now that hero will be quite a catch even in King mark's eyes