The rarity doesn't improve but the rank does.  Normal campaign can only drop up to 3*, while Nightmare can drop up to 6*.  That said 99% of the time you'll be farming Dungeons for gear and just using campaign to level champions.

As ShortOnSkillz notes, the best place to get gear is from dungeons. Use campaign to level champions and to get silver. 

One thing that I didn't understand early on was Clan Boss. I saw it as a huge waste of time. It is not. That is where you are going to get some of the best gear. Make sure you are finding time to run campaign boss every day. Do the highest level that you can to get the best chest. 

Sounds like doing campaign is pointless then.

Nope...Campaign is good to level food and get some silver at the same time. You normally need only 1 built champion and can level 3 food champs. 

After you progressed for some time, you might get some champions like Teodor who can run Dungeons solo. That is the time for me to switch from campaign to dungeon for food leveling.

Even than, the time needed in campaign to run for example 12-3 (6-8 seconds) is diffrent from running dungeons (Dragon 25 1 minute). Your choice....

its the fastest way to level champions, its not meant to be ur source of items(infact u should  e selling 100% of whatever u get in drops from campaign, this is what dungeons such as dragon/icegolem/spider are for.