The randomly generated loot is also one of my least favourite aspects of the games, especially so in D:OS2 where you eventually have to replace equipment every time you level up to avoid falling too far behind. That being said that's just as much the level scaling's fault as it is the loot system's. I think DM PSX' post summarises how I personally feel about the endless waves of weapons and crafting materials that you need to sift through, so I'll leave it at that.
I remember a couple of years ago (I think it was before D:OS2's release but I'm not sure) I read the randomly generated loot is one of Swen Vincke's personal design philosophies because it means you won't necessarily find the same loot on subsequent playthroughs or something along the lines of that. I don't remember if it was a forum post or an excerpt from an interview, but I've been desperately trying to find it to no avail. If it's one of his personal preferences I'd imagine the system is here to say since he, as far as I am aware, ultimately is the highest authority in Larian's hierarchy.
