The auction house has been the most consistently-criticized element of Diablo 3. Many players feel the hack-and-slasher has been balanced around throwing you a bunch of gear you don't need or want, so you'll sell it to players who do and hand-pick your upgrades from a spreadsheet. This process isn't as fun as getting the gear you want from the half-exploded corpse of a demon. Blizzard agrees that this is an issue, stating in a massive community Q&A on the official forums that it's something they're addressing.
"Something we discuss frequently is how the Auction House has impacted the game and how we can refocus players away from farming the Auction House and onto farming monsters," Game Designer Travis Day wrote. Working toward that goal, today's 1.0.7 patch introduces a new crafting system that utilizes a new resource: Demonic Essence. The DE craftables will be account-bound, removing them from the auction house economy.
"Demonic Essence was made account bound to encourage players who wish to create the new items to play the game instead of simply going to the Auction House and buying all the mats necessary to mass produce the items," Day continues. "For that same reason we wanted the product of the recipes to be account bound as well. We want players to not only find or produce their own items more often but also diminish the impact the Auction House has on the game, and we felt like this was a good opportunity to take our first steps in that direction."
The full Q&A goes in-depth into a variety of topics from PvP rewards to class changes.