What I said, and what is true, is that with far more players and an increased proliferation of item trade, we have to factor in how many items are being found by players and how quickly a player can gear up by 'sourcing' items from others through trade and the convenience of the gold auction house.
If we say "a player should have X power in Y amount of time through drops" and completely ignore that the time factor can be reduced by simply having access to more drops through trading and the auction house, players would be gearing up far quicker than we've determined they should. It has nothing to do with the auction house per se, but the general ease at which players have access to more items than they would without it and us needing to keep that in mind while balancing drops. It would be rather poorly thought out if we balanced drops completely ignoring all of the ways players can gear up, and trading is certainly one of them.
I would paste link to this Bashiok's post but I can't since it's my first post here.