In D3, you could buy equipment directly from the RMAH. This undermined core gameplay mechanisms since any loot you were likely to find would be inferior to whatever was available for pennies in the store. So why bother running the dungeons at all?
In DI, you don't buy gear directly with money. Instead, you buy access to dungeons with guaranteed drops of high level items which are statistically infeasible to obtain any other way. But this still lends plausible deniability: you're not buying your gear, you're just buying a spin at the (very weighted) wheel.
Interesting. Why would the publisher have such a ToS? Just so they monopolize the revenue from in-game sales? Or is it more altruistic, like preventing new players having an unfair advantage? I would have thought encouraging a secondary market in their game would actually attract players.
A lot of the outrage comes from the fact that 1. Diablo is originally a PC-based IP with a PC gamer fanbase, and PC gamers are used to different monetization schemes and generally don't play mobile games. Even without the gambling mechanics, there already was a huge backlash about Blizzard making a mobile Diablo game 2. Diablo is a "western" IP where such monetization schemes are less common and the penetration of PC players is higher compared to other parts of the world where mobile game penetration is higher.
> And can "winning" result in a financial reward
Generally speaking, no. There are no competitions for these kind of games. The only way you could cash out would be to sell your account, which is against the ToS, but commonly done nonetheless.