I can't change the fact that you don't feel the way that I feel. I will say that level appropriate means only that the gear you have is appropriate for the monsters you are facing. To example. My 37th level wizard is using a wand that is 25th level appropriate because it is the best weapon I have found thus far. The DPS is 56.4 and is only that high because of the socket and the Ruby contained therein. If you go to the Auction house, you can buy weapons for a 37th level wizard where the DPS is in the 70's and 80's that have an empty socket. This, I would deem to be Level appropriate. And I often find the game more challenging than I think appropriate Because I don't have a better weapon. Doesn't mean I CAN'T progress, but if I went to the auction house (see the hook) I could progress further more easily.
Like I said, level appropriate is a meaningless term. Its either a useful piece of equipment or its not. Not every level 37 weapon has 70 dps, and there are weapons out there that are useable at a lower level but have more dps. Just because the auction house is there and makes the game easier, is in no way an indication that Blizzard is pushing you to use it. Diablo 2 was the exact same way if you played through it normally. You ended up using gear far past its 'level range' because it was the best gear you had found. If you went out into the trading games (or just followed around a mf bot for free gear drops) you could easily find FAR superior gear to what you would find in 10 regular playthroughs. Are you suggesting that Blizzard designed D2 to push people into trading? Its just the nature of the game man, you aren't supposed to find all the best gear as you play through the game normally, you aren't supposed to have the highest dps weapon available, its the same in D1, D2, Titan Quest, Torchlight (though TL is admittedly a more casual and easier game in general, so its not a big deal that you are wearing inferior gear), and all of the new batch of coming soon ARPG's are going to be the same way (Grim Dawn, Path of Exile, TL2).
As far as paying for the blacksmith to be upgraded, I expect that the same effect could be done merely by having the blacksmith (and jeweler) level up with the character. But the developers chose to make it so the player had to pay to do this, thus making gold even rarer than it is now. Why so unless they were trying to suck out gold from the game. I don't have a problem with a living economy. But to appearances (or at least to my perceptions) these decisions were made expressly for the purpose of enticing you to use the auction house.
This is pure nonsense. You are turning a completely normal and expected game mechanic (pay money to craft better gear) into the boogey man. You are LOOKING for problems where there are none. Would you even imagine that there was some secret agenda behind this mechanic of there was no auction house? Would you think anything strange of it at all? What is your response to the fact that Blizzard has acknowledged that upgrading and crafting is too expensive currently and they are going to tone it down?
I am not trying to sway your thinking. If you believe differently, great. I, however, feel very strongly that the intent was to make it more about commerce rather than about making a good game. I get why they did it. If you could make a game that made you money once, or a game that made you that same money, but continued to make you money over the long haul, wouldn't you do the latter? I am just saying that I think they were a bit too obvious in their greed.
And I never used the word "Require". That was your choice. You clearly are not required to use the auction house. It is all voluntary in nature, but the structure is there and pretty clear to my eyes, that they would much prefer you use the auction house and more specifically the real money auction house as that makes them money. And they made it a suitably slippery slope to get there.
This isn't really a subjective matter. Obviously everyone is entitled to an opinion, but if you have nothing besides your general 'feelings' about certain mechanics, it would be nice if you didn't spam it over and over in a 'D3 sucks' thread as if it was a fact. Here is an objective thought test for you - if there was no auction house, would the game need to be balanced any differently? Is there a need to change any part of the game if the auction house didn't exist? The answer is no. This is objective 'proof' (I'm using the term very loosely, since this isn't really a scientific investigation) that the game is not designed to force or even gently push people towards the use of the auction house. You are seeing things that aren't there, because you are actively looking for them.
There is a much more rational and less devious reason for Blizzard to make the AH and RMAH. Diablo 2 trading was a nightmare, there was no way to know the real value of an item unless you spent 8 hours scoping out different prices for it from different people, or went out to fan forums to get info. Sitting in trading games, throwing up your items in the trade window and looking through other peoples items one at a time, huge pain in the ass and a time sink. The other problem with D2 was the massive underground trading community, namely the dozens of websites selling items for real money, and of course D2JSP. Blizzard has no way of controlling these, and theres nothing they can do about it. They destroy the economy, and make it impossible for most casual players to ever get access to any of the high level stuff because they don't know about these 3rd party sites, or are smart enough to stay away from them. By putting in the RMAH, they give clear and unfettered access to all the items in the game to everyone, in a safe and easy interface. They also allow these casuals to participate in selling their items for some money without having to worry about being scammed, having their computer infested with malware from visiting a shady 3rd party site, having their information stolen, or getting cheated because they can't figure out what their items are really worth. And all of this without affecting anyone who doesn't want to participate in any of it.