I should probably point out that that train of thought was solely for dwravish culture. Men and elves would probably only let their most skilled smiths work mithril (again, value) and only the most wealthy would be able to afford it. So it would mostly end up with royalty anyway - particularly with Men, I think - but only the dwarves would make sure that it stayed that way.

At least, that's how it worked in my head. XD

Yeah, I didn't really get the whole coat-thing either when I first read it (ooooh, so long ago XD) but ended up with insta-feels as soon as I read LotR and realised how important/valuable it must have been. That's one thing I love about the scope of Tolkien's universe: sometimes things like that pop up to whack you with a bat mid-story.