No, but it certainly does work. In Diablo 2 gold i abundant and never used for anything. Now they are adding in systems in which gold might actually be used. The crafting system, if it creates good items, can also be used for this purpose as well. It gives something for people to strive for besides itemization. Having more goals is better than having one goal.
Maybe the long term d2 players liked being able to say eh, I'm sick of my barb, I'm gonna trade all my barb gear for zon gear. I don't know about you but that option is a lot more appealing to me, and makes me want to experiment with a lot more characters then most other games do, where its eh, I'm sick of my barb...but do I really wanna spend 3 months doing the same boring grind I just did on my barb just to get them up to par?
Yes... That's exactly how "replayability" works. You are suppose to make a new character and build it from the ground up. If you just trade all your items for different ones than you defeat one of the main time sinks of the game, and what the game is all about. Getting the items.
Can you just name for me one online rpg where gear binding was a success in keeping a long term, stable game economy? I can name a few where it didn't. Dungeons and Dragons Online and Last Chaos...
Besides if your main argument for why bound items are good is because BLIZZARD SAID SO, that's not not really all that good of a reason. I mean, after all, MY MOM said bound items are lame, she knows more then blizzard.
Sure... World of Warcraft. If everyone can get their items by simply buying them or trading them for other items it defeats the replayability factor of the game. I am not saying that all items should bind to the character, but having the most powerful items bind on equip is important. Otherwise you are going to saturate the in-game market. You need to have people keep playing the game to get the items.
Each character is suppose to be a new experience, and when you get to the end of the game you are suppose to work on building it up. I consider trading items on one character for another to be a form of cheating, merely my opinion of course, but that is how I look at it. You are taking the one thing away from the game that it really offers. Imagine if the tiered gear was BoE in WoW.