There's nothing stopping you from setting the difficulty a bit lower and just using items you found yourself. The game has a 10 point difficulty scale, so if you find it too difficult without using AH items, just set the difficulty down. This is by design. People who want to use the auction house can set the difficulty high and bid for items. If you don't like that just set the monster power a bit lower so you can beat the game without resorting to auctioned items.