I agree. 1.07 isn't bad for anyone who is still enjoying the game but there isn't anything here that would bring back anyone who quit. I still think they need to do something with mob density in acts 1,2, and 4 though. These changes seem to be aimed at getting people playing outside of Act 3 but they need to get the other acts closer to act 3 in terms of experience gain. Even with that change I think they only way they can get back people who quit is to add more variety or some interesting new systems to the game.
I see your point here but I think there can be some middle ground where you have a reasonable chance at finding good items and still having the AH as an alternative route. I think everyone agrees that the AH being the only way is poor design but realistically that's where the game is now.