Not sure about Diablo but one of the reasons I can think of why some web site's password is case in-sensitive (it is not uncommon) - they are checking the user password directly with MySQL, e.g.

select * from users where user = 'john' and password = 'PASSWORD'; -- the password is actually case in-sensitive if your table collation is ci (which is the default)

Of course this also implies the site is storing the password as plain text..