While some may argue that it will not work, this was due in some part because of pirates. While it would be possible to get another server up and running for pirated copies, it will take a ton of time and effort since none of the source code for the maps, or the AI of the monsters is there. While you could somewhat recreate the look of Diablo, without the source, you would basically have to code a new game to have it work on other servers.
If there was an offline mode, and all of the files existed on the DVD, then it would be pretty easy to get it up and running. Like it or not, this will severely hamper piracy.
The other benefit as has been mentioned also seems valid, as without all the code, it would be more difficult to figure out the hacks to be able to dupe, and could possibly even help blizzard stop bots.
While I would like an offline mode just for playing around, I understand where they are coming from and welcome it if it adds to the enjoyment of Online Play (which to me is the biggest draw of Diablo). The story (while good) never had the staying power of the Multiplayer aspect in D2.