Like no only does it create a unfair advantage with wealther players as they can pick up better gear. But it can also create a very large rise in inflation on the server ecomony as the Gold Pieces / Zeny / Credits / what ever is not worth as much as it use to be.
I remember this being a very big problem with Star Wars Galaxies a few years back. And with in about 6 months we did see prices nearly triple on items and services.

What players do not realise is that transactions do carry and audit trail with your player log file. So if the devs feel that the problem is getting out of control, they can start pin pointing who the farmers are.
The other thing that i do like about WOW is that a lot of the higher level items are soul bond to the player when they use them or pick them up. This ensure that the item as a one use only.

Blizzard as learnt from a lot of other mistakes that other MMORPG have made. About the only thing that they can not 100% control is farming.