Why would it be illegal?

Because it could seen as online gambling. You spend money to buy items to then grind to find more items to hopefully cash out.

I'm honestly surprised that they haven't been so classified yet. The theory-wonks had made this connection as far back as 2005, and the IRS wasn't entirely blind to it. (Though when Dibbell published Play Money in 2007, they had no clue how to deal with it.)

I guess with all the hysteria about video game violence, no one has had time to actually look at what's going on.

ETA: I'm guessing that the fact that there's some skill involved makes it more okay. Like a fly-fishing tournament.

How is clicking on monsters to get drops different from a slot machine or pachinko? - Those are illegal in many jurisdictions.

Because you aren't likely to lose money clicking on monsters.

Also, by that logic, buying a pack of baseball cards is gambling.

Probably something to do with not having to pay to play. That's a pretty big difference.