The bigger problem with the AH, me thinks, is the lack of information you have before you even go there. Because everything is random, it's hard to know what really "good" is. You might see something that looks good in the AH, but you don't really know what the odds are that you will get either that very item, or a better item, the next time you play.

The concept of rare is so broad that it basically encompasses all items worth trading. It's like playing the lottery, only you don't know what your odds are of winning, the jackpot is constantly changing, and you don't know what the odds or jackpot are of other lotteries.

I'm not too worried about it though. Blizzard can easily make very small tweaks that change the entire economy. For example, they can release a set of items which can't be repaired, BoE items, or somehow quantify the probability.

Imagine if every item had a probability number attached to it. The AH would be FUNDAMENTALLY different. What if the probability of finding this item that you think is really rare is actually quite high? Maybe the odds are actually 98% if you play through your current difficulty. Still worth it? Probably not.

I like the AH, I just don't like that I don't know what I'm looking at.