I think I should reiterate the extremely critical point that instanced loot is fundamentally incompatible with the entire "drop-in, drop out co-op" nature of the game. This is not a MMO game with a central server which holds all your character's information and loot status.
There is one host and 1-3 guest players joining, but all the information is saved on the host computer. That means that when the other players leave, all their instanced loot remains on their characters under the control of the host.
In other words because there is no central server, you can't really even create proper instanced loot in the first place. Implementing it would have to mean each player gets a crack at a container or corpse. All that would go back to the host computer's save file. It would completely and utterly break the entire loot balance of the game because there are now 2-4 times as many loot drops as a single-player gets.
Not to mention that Larian is not keen on implementing a system of loot which checks to see what you have points invested in and only drops loot of that kind. The reason they don't like that is that it makes it difficult or impossible to change to a different build if you want to try something else.
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That is an awful lot of difficulties which would need to be overcome in order to solve the problem of "I want to play this mostly co-operative game with players who insist on acting like griefing assholes in an MMO. Save me from myself".
