I think there actually
are XI rated items in the game, but I'm not sure on that since I haven't played a New Game + in forever. Might even go up to XII.
Starting is really wierd though, because at the beginning they strip all equipped items from your previous save (since obviously most of the companions you had at the endgame aren't present at the beginning), give you the starting Lancer as per usual and dump all your previous gear into the inventory so you have to spend the rest of the game doling out your old gear and dumping stuff you don't need.
The inventory in Mass Effect 1 is really poor, to be honest. I think it suffers from the complete opposite of, say, Skyrim (which is terribly overdesigned and feels like it was designed solely by an art student), where this seems completely underdesigned and so spartan that it appears slapdash and cluttered.
But instead of doing away with it I think they really could have built upon it and turned it into something really intuitive. Even something as simple as
stacking items into a single inventory slot would have saved time scrolling. Bioware have always fumbled with interfaces in their RPGs, and it might do them some good to put some practice into it.