I never played Diablo 3 (for many reasons I won't waste peoples time here), but I have read many who argued that the system you explain is what they think killed the series. /shrug
There are many problems with Diablo 3's loot. You know, basically everything besides smart loot. Smart Loot was however very amazing. The only real complaint anyone ever had about it could not physically apply to Divinity as you cannot grab an item on one of your characters and then give it to a different one in a different game.
However that's also why it wouldn't fit perfectly. Smart Loot worked because everyone had their own gear drops tailored to them. A smart loot inspired system for something like Divinity would be a lot more complex since loot is shared by the whole party.