Quotes from the D3 Dev AMA

[Ashock]

Frag this is Blizzard. Of course it is going to be FOTM TIME!. I have seen too many times that their developers are working on the basis of 'do not do little piddly 5-10% changes to adjust things since it can take too long to get to good level, do x2 and x4 adjustments to really see the effect of what they have done. Then followed by a number of patches doing a cycle of super buffing and heavy nerfing, they will start to get to balanced point. Then its time for a super patch or expansion to change a bunch of the game mechanics so it all has to start over again.

At least this time we don't have to reroll our characters -- just farm gear to support the skill if we need it.

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I thought this quote was very interesting:

The auction house has absolutely no effect on drop rates. There are conspiracy theories and misunderstandings but I do want to re-iterate, the is NO interaction whatsoever. Bashiok mentioned earlier that we took the AH into account, so let me expand a little bit on that.

The drop rates were tuned for a player who would never use the Auction House. For the majority of internal development we didn't have an Auction House, we all played using our own drops only. I've personally leveled multiple characters from 1 to 60 internally before the game came out using only drops that I found - we all did.

When we say we "took the AH into account" that means it's one of many factors. ie. some players will choose to play without trading, some players would play in a group of 4 where they share drops among each other, and some (as it turns out, many) players would use the AH.

Three weeks after launch player's gear is much higher than what we were expecting. When I killed the Butcher on Inferno for the first time I was using a weapon with 492 DPS. There are also certain passives which are much more powerful than they were during internal development. One With Everything, for example, was basically never used internally because we didn't have an auction House. With the auction house, it feels like a mandatory passive. In retrospect we should have seen it coming. In the game's current state though, it's a powerful Monk ability that gives Monks a big survivability boost and has some interesting (some would argue fun, others would argue negative) effects on gearing.

I consider playing without the Auction House to be a very fun way to play the game. I'm personally planning on rolling some new characters that I'll set aside to be "no-AH/no-twink" characters. Much like in D2 when I would make a new character with a friend and we'd agree with each other not to twink our characters out.

This matches well with my experience and what I've seen other people be able to do. When I was at a lower level, I could believe all the conspiracies about drops being tuned based on the AH and making "using the AH" a requirement. But as I get to a higher and higher level and I see what people are able to do in hardcore without using the AH, I realize that no, people who insist that "using the AH is a requirement" simply don't have patience to play the end game content as it was designed -- with slow and steady grinds until you are able to get the gear that will allow you to play in the next act.

You can believe what you want, but if you are melee, then w/o extensive use of the AH, you will be going nowhere past Act1 Inferno, if you are soloing.