Hacked items are so abundant on the console and Blizzard doesn't have control over it. That is why seasons will never come to the console. No one really cares about what happens on the console except for a group of players that play with very strict ethics on not using exploits and gear hacks to gain power.
There are legit players on console, they are just hard to find. If you are on PS4 there are 2-3 legit communities you can join. Sadly, online play is a wasteland. However it still isnt the worst part of playing on console in my opinion. Nephalem Glory Orbs are the biggest issue, once you hit Greater Rift 60+ you will see what I mean.
Man those FEELS...ive had it since RoS came out one ps3. Upgrade to ps4 asap. First week on saw all the hacked items. Didnt go back till about a week ago. A RL bud of mine said hes make a game about 30mins later ive jumped from 750 paragon. To 1500!! What a heartbreaker...
Honestly, I'd keep the item. I've spent the better part of two weeks just trying to get the gem of ease (it was the second to last legendary gem to drop for me) and then level it to 25 so I can get some alts up to 70 quickly, but it is pretty boring (had some bad runs where the upgrade failed even at 80-90% range). A weapon like the one you got would have saved me a lot of time. I'd swing it once and put it back in the stash for the next character.
I don't know anyone who likes grinding their alts up to 70, in fact I see people offering to pay real money for others to power-level them there in a day. Gem of ease should have the stats reversed--at level 1 it should make any weapon equipable by a lvl 25 char and each gem level reduces the level by one. At 25 it gives the xp bonus as well. Would be usable by alts far earlier in the game.
I would contact Blizzard and see if they could remove the "exploited" paragons and report the player as well as ignoring him/her if you can do that on console.
Such an annoying behaviour! Would be really pissed if that happened to me. Wouldn't be as pissed if I could reset my paragons myself though, then I could've just left the game, reported that douche and reset my paras.