As a GM I think there are a number of things to keep in mind when we are Tuckering up our kobolds.
While there is nothing wrong with equipping Kobolds with firearms. siege engines or war dirigibles to keep them relevant and challenging to a higher level party - when you do so they are no longer 1/4 CR creatures. The number of kobolds, XP and party level need to reflect that fact.
While kobolds (and goblins, etc.) are smart enough to use any item in their treasure trove that would be useful to them, there are several factors to keep in mind. The first is that not everything in the trove will be useful to them. Just as most troves are not 100% useful to a party of PCs and an even lower percent would be useful to a party with only one class represented, the merchants, travelers, etc. that the kobolds have gathered their treasure from won't have been carrying exactly what the kobolds need. Nor can they necessarily go to town and trade for those items. The second item is that you need to bump up the value of the total value of the treasure the more you customize it for the kobolds use. If the treasure consists largely of small sized armor and weapons and the party can't use small armor and weapons - you've automatically put the party in the position of selling it for half value (unless you put in a nearby halfling village that may value it higher). Also, consumables that you plan on having the kobolds consume can't really be counted as treasure the party is going to obtain. It's easy enough to have a kobold scout warn the camp of the oncoming PCs in time for the camp to all pull potions and literally drink the entire hoard before the PCs are aware there are kobolds in the area.
Don't forget that it is not a contest between you and the party. You will always win, congratulations! It's pretty easy to "out-smart" the players given that you are presenting all of the information they receive- but that isn't much fun for the players. Make sure that you keep things "fair". Have some rumors in town about the threat the local kobold tribes have become as they have started to unify under the "master". Have an occasional trap or plan that doesn't work that well. Maybe a kobold failed a craft check and the traps DC is lower, or perhaps a careless kobold forgot to reset something and it fizzles completely- do you remember to grab your keys, wallet, phone, lock the door, lock your car - every time you go about your daily routine?
There are CR appropriate monsters to challenge parties with only a few, or only one individual. Some monsters are supposed to be challenging because they come in Hordes. Hordes of monsters allow certain builds or feats to shine. There in nothing wrong with a horde of monsters. Mechanically kobolds are designed to fill that role. Let the party feel mighty as they mow down heaps of kobolds. Then let that feeling of triumph turn slowly to dread as wave after wave of kobold continues to rush in from every tunnel and the hit point attrition builds and the parties spells and magic items drain away....