Whatever its lack of merits, D3 was still a product of the giant called Blizzard, and it's still a time-sink game. Chris and I bought the game after auction-house shutdown announcement, and there's a lot of things they are doing in D3X to try to promote casual play at all stages of leveling.
Still going to make an impact on everyone else around the date, IMO, despite reduced hype. Smaller then D3, but still - most players aren't exclusive to their chosen genres.
The buying public appears to have a relatively short memory span so I would normally think going after their launch date by ~ 2 weeks would be better. (The time that I estimated it would take for a casual player to explore new content with the Crusader and indulge their addiction for a while, then open Steam to look for something else.)
However, you're the one with the grips on actual numbers and how TLF is developing. I'm fairly confident that the nature of TLF, unlike Valley 1, decreases the impact of D3X.
As for why the game didn't recover after that, mighta been because Diablo was pretty pricey upon release, at full retail. Not to mention everyone then obsessing over it. Only to start an endless litany of complaints over it later, hah. Or at least that's my logic, anyway, which may or may not actually be logical.
To me, it's the lure of being powerful, set in a time-sink game. The lowest common tactic to increase playtime is to increase the desirability of some goal you think you can reach, but hide the fact that it takes an unknown X-hours to get yourself there.
Resolving the RNG hammer was a good argument for the AH's temporary existence, but RMAH kinda trashed it. The people who complain and also the people who really want to play, but get pwn'ed by the harsh justice of RNG. Hence tailored loot in D3X, instead of AH as a solution.
BTW, partially tailored loot is the
norm in D&D-based adventures. Hence lack of complaints in itemisation against Baldurs Gate, etc. You will always get that scroll of Fireball for your wizard some time before or after you need it. You will get a worthwhile item for slaying some great villain, because he's
wearing them. A good GM will never taunt you forever.
Whenever your playing this time-sink, you're not going to play anything else. Also, these games have a same rebound effect after you realise the sheer waste of time that was and stop for a while. After that, there's plenty of new games on offer...