Regarding this article and this statement:
...that only a small percentage of players would use it and that the price of items would limit how many were listed and sold.
I do appreciate the admission of fault, no matter how late but, what? How could you not have expected absolutely everyone to use the auction house, especially when everyone has been bitching about it from day 1? Low hanging fruit theory states that players will more likely than not, take the path of least resistance to upgrade gear. In Diablo 3's case, that is the auction house, as it is the easiest if not the only way (good luck with actual drops) of obtaining high level upgrades.
I mean, this game is so centered around the gearing treadmill that just about everything that you do is influenced by how well equipped you are. D3 almost forces you to use it.