You don't need invisible armor per se, but rather an option to just hide it. It already exists with your guild cape and helm.
I really don't know what RPG out there has an option to fight naked with full effectiveness. Even in Fable, if you fought naked (as part of a quest boast) it was just that: no protection whatsoever. So of course, you took serious damage.
This idea, however, would be interesting for April Fool's...in every other aspect of game play, it isn't something I would consider. When I first got Guild Wars I was surprised you got hide your helm but keep the armor bonus. However, your suggestion takes things a bit too far...
On a side note, a long time ago doing a few CM's (Fort Aspenwood) I decided to fight like a true warrior! Just wearing my shorts. To my amusement, an enemy warrior decided to strip down to his underwear too, and we fought mano a mano.
