I read an article long about the time that D3 launched about how they were working on D3 in the early 2000s, only 'Corporate' wanted them to go in a different direction. So a bunch of the programmers left the company. Not sure how much of that was hype, but I agree 100% that the game we got was based strongly on the "Pay to win" model. And that quite a lot of the 'Fun' elements from D2 were altered to fit into that model, making the game significantly less fun to play.
Diablo was created by Blizzard North, formerly Condor. A company Blizzard bought and brought into their fold when Condor was developing Diablo. This team made Diablo, Diablo 2 and the Lord of Destruction expansion set. To really set the proper context, these are the people that created the Diablo universe and made the games. It was their 'baby' so to speak. Diablo came from Blizzard North. There are some myths that Blizzard actually changed their direction to make Diablo what it was, related to the initial production of Diablo 1 being based around a claymation animated game, which was true. But, it was Blizzard North who went away from that direction to an action based RPG with the gothic setting we knew as Diablo before this travesty called Diablo 3 was released.
Their plan following Diablo 2/LOD was for Diablo 3 to be an MMO, not an ARPG. They felt it was their natural evolution from D2/LOD. Blizzard's parent company, Vivendi, was not happy with this direction and the rumour is that they demanded an ARPG for the 3rd instalment. Some think this is because they were concerned another MMO from Blizzard would take full optics off WoW, a reasonable guess. Blizzard North refused to capitulate and in 2003 the key players of Blizzard North quit. The main players; Max & Erich Schaeffer, David Brevik and a former Blizzard Irvine staff/Diablo, D2 & LOD producer - Bill Roper - were part of this exodus. These were the chief players who helped craft the original Diablo games and expansion.
They went on to make Hellgate: London with EA as their publisher. Their budget ran out and EA made them release as it was. Game turned out very poorly. Flagship Studios, the company they formed under, was dissolved after the game tanked.
Later in 2005, the rest of the remaining Blizzard North team quit from Blizzard and went their separate ways, part of this last exodus was Matt Uelmen, the composer responsible for the epic music in the original Diablo games. The last examples of his work at Blizzard is the entirety of The Burning Crusade soundtrack.
There are some leaked 'alpha' shots of what is referred to as 'Blizzard North's Diablo 3'. These shots are actually from what was being worked on after the first quit in 2003 up to 2005 when the rest quit. The guess is that they couldn't make it work and many of the Blizzard North team left were disillusioned with it.
At that point after 2005 to 2006 Blizzard moved a bunch of World of Warcraft developers and hired on a few new people, such as Jay Wilson and a couple others, to work on a new Diablo 3.
Just a quick bit of history to enlighten

The reason Diablo 3 sucks as badly as it does is because of this parting of ways in 2003. The actual Diablo people had nothing to do with Diablo 3, it's the work of World of Warcraft developers with a serious case of failure up their backside. While I personally would of enjoyed yet another ARPG for Diablo 3 from the original team, considering how bad the actual Diablo 3 is that the WoW developers released, I would of much rather had the Blizzard North Diablo 3 MMO.
This is a good article that gives some more detail on what is so wrong with the Diablo 3 development team :
http://www.gamefront.com/why-im-afraid-to-review-diablo-3/
First thing out of my mouth when World of Warcraft was revealed was 'Why not World of Diablo for fuck's sake' So I am a bit biased.
