Item speculation provides liquidity. People effectively hoard goods with the expressed purpose of re-listing them so that the more casual seller gets his money and gets out. The hardcore seller provides a much more dependable source of items. Sorry, this is just basic economics. The more speculation, the more trading volume. In a commodity based market like D3, the more speculation, the more item variety and price competition. Item speculation is regulated with the trading commission. Small commissions promote it, larger commissions are detractors. If you want to reduce "dirty item flippers" you substantially raise blizzard's rake. 50% aught to do wonders. I just created a wonderful gold sync too, yay inflation reduction! People listing things and taking them down? Gold price per listing. 10% anyone?
Blizzard created a system in D3 where items exist on a very VERY wide spectrum. How much damage, how much crit damage, how much primary attribute. I haven't even talked about the life gaining or other side benefits a weapon can give, just calculating which gives more damage gives several axis of complexity. In D2, uniques rarely had random properties and damage ranges were small. They were fairly interchangeable in purpose. This lead to commodity based pricing. D3 doesn't have this, they have very hard to explain stats. How do I spam for a 1000 DPS 1 hander? Gotta have crit damage and a socket and primary attribute? Certainly even there, 900 damage + 100cd+socket+250 attribute probably beats the hell out of 1000+50cd+socket+50 attribute. Maybe the 900 damage one has life steal too, who knows? If the existing loot system had no AH, it would be extremely difficult for people to find what they needed. The player base would be very split between those who had "broken through" to a playing formula that can generate a high return per hour and those who were simply killing things at the game's designed "questing" pace.
The AH was not the problem. It was the only thing good about D3 to me. The problems were RMAH creating resentment in players by USD giving huge leaps in gear, insufficient controls on trading volume leading to a surplus of ever-powercreeping low end items, and too extreme an item usability variation leading to too large a percentage of useless drops. You don't remove the AH, you just combat the problems within the system. Blizzard is being lazy throwing out the baby with the bathwater and the expansion will be equally if not even more broken than the vanilla game because of it. Too much of D3 was designed with the AH in mind.
I would increase the gold prices, create listing fees, remove the RMAH (though you could allow straight ingame gold purchases at a blizzard controlled rate if you wanted without harming the economy), drastically improve drop quality, drastically decrease drop quantity, and seriously look into means of controlling ingame gold inflation/deflation. Instead, blizzard will just make me spend more time on third party websites looking at item descriptions and making stupid screenshot mats than actually playing their game.
Title: It was given by the XKCD moderators to me because they didn't care what I thought (I made some rantings, etc). I care what YOU think, the joke is forums.xkcd doesn't care what I think.