How did the bot interact with the game? You could send key commands and text to the program, but you can't easily read the item price for example. That script at the end doesn't tell much.
This strategy has been successfully used for a variety of game automation, including WoW auction house arbitrage and a multiplayer Starcraft II AI / bot.
This method is advantageous because it doesn't have the overhead or uncertainty of going from pixels back to information but it also does not require patching or inspecting the game's address space which is fragile and often triggers anti-cheating or anti-botting systems.
You can read a good write-up about this method here:
Just looking without touching rarely (never, to be honest) triggers any anti-cheating systems. It's madness enough trying to stop people touching, trying to stop them looking reliably is futile.
The graphics interception hacks are pretty neat though, but I wouldn't say it's a common method at all.
A decade ago, botting in a game called Ragnarok Online was huge. You can find a hint of how structured those communities were here: http://www.openkore.com/index.php/OpenKore
> Later I found out how to completely turn off the game’s graphics, making the Diablo windows look like black boxes.