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I played the death out of Diablo 2 and eagerly awaiting Diablo III. I stopped playing after a few weeks. For me, I think it mostly fell flat for two reasons: a change in my tastes and itemization.
I think a lot of it is that I am a different gamer now than when I was addicted to Diablo 2. I hate running content over again. I mainly play games for world exploration and story now. Diablo 3 felt great the first few times through. Now it's just...boring.
And then there is the itemization. What I loved about D2 was that the items seemed more fun/unique. In D3, everything kinda seems like a "stat stick." Even moreso, I felt that I really needed to grind in D3 for gold just to AH gear with better stats. Simply not fun for me. I am now working full time and am too busy to dedicate that amount of time to running the same content over and over again.
So for me, it's not really that D3 is awful. It's more that I have changed as a gamer and with less free time, I'd rather be playing something new than replaying content that is not very rewarding. I will probably check the game out in a year or so and see if much has changed.
"Live for yourself, there's no one more worth living for. Begging hands and bleeding hearts will only cry out for more."
I think with the presence of real money in the RMAH, the amount of glitches and exploitation alienated players. There's an air of "why buy anything when they might just nerf it next week" and spite that a few players really ruined the economy early on through glitches and exploits, which kind of permanently hurt the economy. The RMAH means that Blizzard must quickly nerf and deal with anything that will let players take advantage of the market, and players don't like feeling nerfed every week.
That and once you beat Inferno it's pretty much done. I beat Inferno pre-patch that made it easier, and just grinded the same things over and over and over to make a few hundred on RMAH. There's just no much to do with a low level cap that's easily attainable and not much build variation... players go pretty unanimously with what's considered "the best" build currently because there's no reason not to.
My competitive CS:S videos: http://www.youtube.com/watch?v=KLxqydBplX0&feature=channel_page&fmt=22