The only reason I can think of for removing the auction house is if they wanted to do away with trading altogether, because old fashioned trading is just an extremely inconvenient auction house. Because I can't see them doing that, I am forced to conclude that they have changed the loot system so that you can rely on self-found gear. But if players are not forced to resort to the auction house in order to progress, then you cease to have a problem, so why remove this convenient feature?