First of all, items should not decide character development and skill usage.
It’s not a good idea if you first have to collect high-end equipment, which you can’t even get together if you’re unlucky, in order to then be able to play some build of the character and use certain abilities, which are then only strong enough.
This is already crap in D2, e.g. with the Caster Necro with teeth, spear and bone spirit.
But it also needs an incentive that not everything is completely irrelevant and requires no effort, or a certain level of specialization.
Only it should revolve around the talents and the associated story and, very importantly, a depth related to the world, the whole development in connection with the associated structures such as guilds / order houses, clans, groves, churches / monasteries, Necropolis, hunter camp or whatever associated clan you take. This must of course be authentically and credibly linked to the world and, depending on the class and specialization in the respective class, clearly and distinctly from the rest.
Just depth.
And then there are items as a bonus. They are fun, but the player is not overwhelmed with them.
Weak standard items also have to remain more inconspicuous in terms of color and not obtrusive, so that they are not perceived as overly present, even if they drop a little more often.
Rare things have prominent colors and are rare and not that all 20 mobs have one.
And then we have set items that are hard to find and can also be earned randomly distributed in the world more targeted. They have unique powerful bonuses for the class and specializations and are just fun because they are just more tailored.
Then we have unique items. They are very rare and finding them means a lot of luck. But they have the property of bringing strong bonuses exactly for the slot and are more flexible to use.
So you like to keep a small unique item, because it gives a second character a powerful bonus in that slot at the right time.
Then we can bring scrapped items. Here you can do many things with and also offer upgrades, which is probably one of the most fun and can keep the professions useful for a long time.
If you can upgrade your low rare items, set items again 1-2x, that is quite fun.
The question is, how intensive is the material search.
Then you can also build items yourself, which can fill gaps especially in the beginning, such as Manaleech ring, which sinst nix can, but is very helpful at first.
In D2 LOD with the runes you could have made more meaningful things earlier.
But never exaggerate with item drops.
It is absolutely inflationary, if items drop in mass constantly and you are only trading. That seems totally meaningless, as D3 shows.
Items should drop less often and the useful ones even less and the really good ones even less.
Rather restrained, than a sea of scrap.
Nevertheless, the game world is and remains the be-all and end-all. If this is flat and gray, the game will not develop any power and a flood of items at the end and I run one Ini after the next and kill one world boss after another, this will never be able to catch up.
Game world + character development of skills linked to the world and depth and broad and slow…
But when I hear you can continuously re-skill… I do not understand how the creators keep making the same mistakes and do not understand that it is very important to draw hard boundaries on such things… Otherwise the game has no value because everything doesn’t matter anyway. And if that’s the case, it’s worthless to play it and go one way… RPGs are like that… They are not item swapping games in some sports game and number wars endgame scenario… That’s exactly what destroys these games over and over again…