This is truly one of the gaping holes in human cognition, this idea that a single participant in a larger system can make a change and then model the results of that change without accounting for the reactions of all the other actors. Especially when the participant in question is by far the largest participant.
I actually disagree that the root problem is that they put "profit over gameplay". The root problem is that they made changes designed to create profit, but failed to correctly understand how the rest of the system would react. There probably is a way to "monetize" the Diablo community more successfully, but whatever that way is it's going to be something more subtle than the Auction House was.
I'd suggest looking at how Valve has monetized the hell out of Team Fortress 2 if you're trying to find a positive example. It's mind boggling what they've pulled off there, and observe that, like I said, it's a great deal more subtle than "let's just put up some payment gates!!1!". MMORPGs also provide a variety of interesting compare & contrasts, especially with the recent successes of the free-to-play models to compare to the WoW subscription/expansion model.