Because Blizzard saw the life span of D2 lasting 10+ years, and the healthy trading scene that sprang up around it, they wanted a slice of that action so they monetized it. They imagined a scenario where D3 would also last 10 years, but this time it would be a constant source of revenue for them, for very little effort outside of server maintenance and occasional bug fixes etc.
In order to gain as much value from the player as possible and keep people playing, they needed to cockblock certain areas. Act 1, 2, 3, 4. They needed to slow the progress of the players. When people get to the end game too quickly, they're more likely to quit. And when they go, with them goes potential RMAH revenue.
They also needed decent drops to be rare as hell, because they don't want you getting too powerful. Look at legendaries and set items. Some people have played for 200 hours and haven't seen one of either. Go to the AH, it was there specifically placed to condition you in its use so you'd be more likely to use the RMAH.
They needed gear checks, not skill checks. Otherwise, people would just be side-stepping the barriers, finish the game and lose interest.
They also needed the stats on loot to be mundane so they had more control over how people used it. No crazy modifiers allowing for emergent gameplay. Again, that would give the player the edge, and shorten the length of time people would be playing, and that wasn't going to happen. And by starting off modestly, it gives them plenty of wiggle room to slowly add more interesting modifiers, gems, horadric cubes or whatever with content updates and expansions.
Throw in always online, no modding, blur filter, etc etc.
So, they made Diablo 3. What they didn't account for was the players lack of tolerance for all of that crap. Now their greed is biting them in the ass. I hate to sound raged, but really, fuck them and their anti-consumer, my way or the highway, protect their cash cow at any expense attitude.
