I've played Diablo 3 through to "Hell" difficulty, and I've not been using my own looted gear since the middle of the "Normal" mode - there's just no competition between drops, and what you can buy on the AH for very little money. The "sensible" play style is just to farm gold, and buy AH kit. Found an item? Sell it for gold (or, very occasionally, AH) - don't use it!
It's hard to feel like a hero when you're popping off to Macy's every few hours to grab a new +1 Sword of Wounding. Your quest to save the world - sponsored by Nike?