tl;dr -- everything changes on Inferno, so scroll down and read only that part if you're in a tl;dr sort of mood. I apologize for any typos/grammatical mistakes; I should probably get back to work, and that guilt is enough to prevent me from proofreading this super carefully.

So, I sort of agree with the linked post, but I feel it doesn't apply to the game as a whole, rather only to certain sections and to certain demographics. I'll explain by digging into the presence/shape of the reward and frustration loops (which can co-exist, imo!) for each difficulty level both with and without use of the Auction House.

On Normal: The game is never very hard. As a result, the frustration loop is non-existent for both AHers and non-AHers. Players using the AH and players not using the AH are pretty much in the same boat, though decent items are inexpensive enough in this level range (1-30) that a player can pretty easily flatten the reward loop entirely (and thus never find anything truly useful to him/her) by purchasing new "good" gear every few levels that's very likely to blow away anything they're going to find. tl;dr: on Normal, the AH serves only to destroy the reward loop (and removes all challenge from the game as well).

On Nightmare: The game begins to get more difficult; you realize things are a bit more serious the first time you see an elite pack with potently synergetic affixes. The increased challenge does not frustrate most players, and for these players the game (as well as the effects the Auction House has on rewards/frustration) is the same as on Normal. For inexperienced players, however, the effects explained in the OP's post begin to manifest themselves. The game gets tough in some places, and the AH can alleviate this pain at very affordable prices. Using the AH creates a frustration loop because buying cheap, relatively powerful gear is easier than learning to play better, and as such the idea becomes to "out-gear" rather than "out-think" challenges. This dampens the peaks of the reward loop significantly for AH users. Nightmare is very doable without using the AH, and as such many users are unaffected and the game still feels a lot like Diablo II.

As of Hell, D3 becomes much, much harder. Elite packs with deadly affix sets become common and characters can be killed very quickly at times whether or not they're prepared for what's coming. Hell, I think, is the part of D3 that is most negatively impacted by the Auction House. Hell is completable without using the AH, but it's hard enough/some parts are frustrating enough that many people will use the AH to augment their gear before finishing it (and will likely do so several times). Hell difficulty, IMO, is where the linked post really shines, and I think everything in the OP's article really describes this very well. Lots of people will use the AH to complete Hell, and as a result will experience the frustration loop and lack of a reward loop described in the post. Since the gear necessary to complete Hell is very affordable still, players can buy their way out of difficult situations and power through without the addiction that comes along with finding awesome stuff every so often.

If you've read this far, thanks! This is where the game changes.

On Inferno, the linked post doesn't apply. Starting with Act II, Inferno becomes incredibly difficult to the point where characters just "playing through" and even characters who have been farming (collecting gold and new items) for awhile in Act I are eliminated by foes instantly and frequently. Inferno is nigh-impossible (yes, some people have finished it, but the vast majority won't for awhile if at all) as it is intended to be and the absolute best gear is needed to progress without major pain.

This gear is very, very expensive, and most players won't be able to afford it. I don't have statistics to back this up (yet?), but imagine that gear quality follows a power law distribution in which there is a ton of crap and only very infrequently do the wonderful thi...