I've been thinking a fair bit about Diablo 3 lately. Unlike a lot of the gaming community, I thought D3 was quite a good game. In particular, I think the ability and rune system was inspired. However, I think Blizzard made one major mistake: the Auction House.
The Auction House is an understandable mistake, though. Diablo 2 had a lot of issues with people selling items on eBay, with all the attendant scams and customer service issues that entails. As well, just regular trading was a big hassle and not easy to undertake.
Blizzard basically had two choices: introduce a mechanism for secure trading; or disallow trading entirely. They went for the first option in the AH. More and more, I think they should have gone for the second option, and just not allowed trading. They already made loot drops from monsters be separate for each individual player. Banning trading would have only been one step further by not allowing others to see the items you drop.
The Auction House had a lot of negative effects. It made the game much too easy. D3 isn't that hard, but the difference between a character with only random drops, and one outfitted from the AH is huge. It devalued the whole blacksmith subsystem. I think that without the AH, D3 would have had far more longevity than it did.
The central fun in Diablo is making your character stronger. After you do the campaign once to see the story, the point is to kill more bosses and outfit your character with better and better gear. The AH allows you to "shortcut" that central fun, all in the name of efficiency.
Too much efficiency is not fun. Players will always argue for more and more efficiency. However, I think it's important for developers to stand firm against this trend. It is especially dangerous to offer shortcuts to whatever your "central fun" is. For example, if the central fun in your game is leveling, I don't think you should offer items that make leveling faster or easier.
For example, looking at WoW, I'm not certain if heirlooms, valor points, or tier tokens have really improved the game at all. They've all made the game more efficient, certainly. But I think that they've caused character progression to become too efficient, too easy. And I think Blizzard agrees with this stance to a degree. In 5.2, they're introducing rare Thunderforged gear, which makes gearing up fully much harder, and a less efficient, longer process.