The prevailing opinion is that the AH killed the fun of hunting for rare drops, and it should be abandoned.
Over time, I've found games that involve grinding for rare drops resembling more and more the psychology of slot machines.[1]
It's hard for me to be sympathetic to people who claim the fun thing is now too easy, because it doesn't involve as much mind-numbing work. If your game only works with a slot machine mechanic, maybe it has other design issues?
The Skinner Box is a well-known and understood psychological data point. The problem is that if you undercut the joy of pressing the reward button, all the reinforcement conditioning goes into teaching your audience that your game is Not Fun, rather than teaching them that "just one more run" will grant them the thing they want.
The problem with the AH and its accompanying miniscule drop rates is that it quantified things too solidly. You can't do "just one more run" with the hope of getting your item. You know that your chances of getting your item on your own are virtually nil, and you can calculate that you need to do 634 more runs to earn the currency needed to buy the item you're looking for.
People get addicted to gambling because of the endorphin rush you get when you win big. Blizzard killed the "win big" and reduced it to going to a 9-5 job to earn a paycheck to eventually buy that big screen TV you want.
Over time, I've found games that involve grinding for rare drops resembling more and more the psychology of slot machines.[1]
It's hard for me to be sympathetic to people who claim the fun thing is now too easy, because it doesn't involve as much mind-numbing work. If your game only works with a slot machine mechanic, maybe it has other design issues?
Also relevant: [2].
[1] http://99percentinvisible.prx.org/2013/04/29/78-no-armed-ban...
[2] http://penny-arcade.com/comic/2007/12/31 (There may be one that's more on point...)