That could work, though keep in mind there is technically no dragon die for damage rolls and assuming you replace one die to the damage roll in some cases big weapons having a low dragon die though doing high dmaage still can seem a bit odd. Though with armour you could simply use any damage it actually absorbs as the durability reduction too.
With those numbers you may find the tracking of damage to weapons, armour, health and mana fairly cumbersome to do every round, as it makes for allot of additional tracking. Especially for enemies, though that can be abstracted a bit too. Unfortunatly I have yet to come up with a good idea to mitigate that aspect myself while playing around with some kind of durability, short of making damage per combat encounter, but then armour and weapons dont have the posibility of breaking in the middle of battle (unless other factors apply).
If you do plan to use the markers, I'd likely go the reverse with them, basically add the markers as damage is sustained to the items (players likely want their equipment fully health most of the time), rather than having the pool and reducing it, as the added markers can be a reminder that an item is actually damaged, while having less clutter as well.
As to the effects of the wear and tear I'd add penalities on top of that based on the durability it has left (assuming you want the added complexity), something like for weapons 100%-75% of durability no penality, 75%-50% say -1 to attack and damage, 50-25% -2 to attacks and damage, while 25% or less is half damage, while at 0 the weapon is broken and essentially becomes an improvised weapon (just an example of what I mean, the numbers/percentages would likely need better tweaking).
As for armour wear and tear, degrading its armour rating as it takes damage is likely a good way to go too.
Henceforth mortal, remember...