That's really not true, Diablo 2 had fun gameplay and fantastic music, visuals, and overall atmosphere, and a reasonably engaging story/world. People played it for that first and foremost, and then stuck around for farming rare stuff after.
True, but all of Blizzard's decision making surrounding the game is going to focus exclusively on the power-gamers who play the item farming, those are their core player base. I know there are people who like to play Hardcore challenge runs, and people who play it multiple times for the story, but they are the minority, most people seem interested in going straight into the farming grind as soon as they finish the story. Blizzard is absolutely going to make decisions around making their life more convenient, even if it actually undermines the gameplay itself or makes the game worse for people who are playing it for the challenge/gameplay.
But if Diablo 2 had just tried to jump straight into item slot machine gameplay, it would have failed. Whereas if it had no item slot machine gameplay and its equipment system was more like Nox, it would still have been a big success.
Did the item grind contribute to its popularity and staying power? Absolutely. Was it the core of what the game was about? Absolutely not.
I highly doubt it would have failed. It's a well known psychological fact that item grinding (or really, gambling of any form) can have a very powerful effect on the brain and can essentially pull in players. PoE is almost entirely an item grind simulator and it was highly successful from the get go.
But I would argue the game IS designed from the ground up to be around multiplayer, party-based item grinding. This is especially evident if you compare it to Diablo 1, which was designed more as a standalone action game.
- Save/Load system replaced with cost-based respawning and waypoints, clearly designed around MP party play
- Deemphasis on quest rewards and more emphasis on rolling for good items at Gheed or farming
- Enemies completely respawning between each game quit/restart
- Locations with a lot of extraneous dungeons/locations that always end with a randomised gold chest, rather than coherent progression from start to finish.
- Much more
The item farming and endlessly-repeatable play informed nearly every aspect of the gameplay and world design in D2. It was very clearly their focus.
Probably the most telling thing is how they make this whole big puzzle quest about finding the right Horadric Tomb, but it makes the most sense just to clear all of them anyway for the experience. Long gone are Arkanes Valor and other puzzle quests, now it's all just about fighting, grinding, and finding good loot.
All of this combined is also why D1 is the superior game, and it saddens me greatly that it's design philosophy has largely been abandoned in favor of the instance-based multiplayer-focused design of D2, to the point where there are a lot of D2 clones and almost no D1 clones.