I feel a certain quantity of no drop is needed, but you need to have a good balance between items which can freely be traded and ones which cannot. I also feel the quality of crafted items should play a larger role than they do in most MMO's.
It might be better to make crafting play a larger role and be used for items that you can freely trade and have found items strictly no drop though they might be used for materials for blacksmith items. Everyone is inclined to there own personal views and ideas on the matter though and I'm certain it varies quite a bit amongst players and developers.
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