I think loot is abominable in all cases. It combines luck-based elements with busy work and a bunch of almost identical stuff, it's like the culmination of abysmal game design. There are no redeeming qualities to loot and it should in all instances be abolished. Very close to that, though not necessarily always horrible (i.e. not horrible when busy work is disabled by limiting th number of experience points strictly) is leveling up.
Loot doesn't have to be luck based