The chance to have an item drop has nothing to do with the quality of the drop given. If I search through random containers in the starting zones, I get random items that are scaled to Level 0-3 or so. In the End of Time, an area accessible as early as Level 2, the random items ALWAYS scale to Level 20. That's what I'm commenting on.
So yes, you are the one who was confused.
EDIT - Honestly, as I mentioned above, it's not even that big a deal. It's not like a player can actually use (most of) the Level 20 items they find, so it's just vendor fodder unless they want to hold onto it for the next 15+ levels. Still, it provides a potential venue for a MASSIVE boost to your gold, early on in the game. Personally, I went from having about 3,000 gold to having 15k gold in a matter of twenty minutes - and that's counting the time it took me to talk to the two or three NPCs that were hanging around. :P
