Let's take a quest like "Voices of the Dead". It's a 6 minute quest or so, and has 10 items on the loot table. If you go into elite and ransack it with 6 characters, you'll get 48 shots at items, and pull on average ~15-16 items, assuming a 33% drop rate, which seems pretty accurate. Higher skulls increase this marginally, supposedly, but the difference isn't massive. If you're looking for a common item, there's a good chance that you'll pull it within that hour.
Taking the 3% rare and 97% common rate that most people seem to agree on, that means that you'll get about half a rare item per ransack. However, in that quest, 7 items are common, but 3 are rare. So you'll get about .15 of the item that you really want per week. So, on average, it'll take about 6 weeks to get the item that you're looking for. And that's with a full group with all passing.
Solo? Obviously 6 times as long. See you in half a year or so, assuming you have average luck.
There's no guarantee that you'll get it within a year, even if you spend the ~$400 that it would take to reroll on a single character every time.
Why is this counterproductive?
First, it encourages just running alt accounts through the quest because the drop rates are so poor. Yes, you can run with people but if everyone knows the loot is rare they'll probably need or at least want it too. At the very least, good luck finding 5 people to run through a quest for an hour a week for many, many, many weeks in a row. While this is fine for their bottom line, this isn't great for the social aspect of the game.
Second, burnout. This isn't like dino bones where you feel like you're working towards something. Because you very well might not be working towards anything.
Third, rerolls obviously double your shot at getting an item, but doubling a tiny droprate (that is not disclosed at all, is that even legal?) feels very exploitative.
Fourth, ironically, it actually decreases replayability in some ways. On common loot, you can maybe think about getting a better curse or a mythic1/2/3/4 item to upgrade your existing gear. But RARE LOOT? Ain't nobody refarming out a golden age shield or artifact ring for a mythic bonus or a curse.
Fifth, it erodes trust in the game developers. The first week MD came out, there was a lot of "so....has anyone actually seen any of these artifacts?" with most people responding "nope, and we've ransacked everything, no one in my guild has gotten anything, what is with the loot in this pack!1?".
There was zero disclosure on which loot was rare or that there was rare loot at all!
When you buy a pack, you aren't exactly buying the items, but when a solo player who doesn't reroll will often need the better part of a year of ransacking to maybe get an item....that's total dung.
Rare loot should either be a niche item that doesn't impact gearing or build (jibbers) or a slight but unneeded upgrade (mythic/curse/reaper items, rare filigrees). I think rare loot is GREAT for keeping people playing especially the more results-focused, hardcore players. But it has to be done right, and it certainly wasn't with MD.
How many people have either ignored MD loot entirely or stopped playing altogether due to this mechanic? A lot. I know many. Making a quick buck but splintering the playerbase is not actually a winning long term strategy. Most players enjoy having a sense of progress, but when the reward is nowhere near proportionate to the time and energy invested, that sour taste in your mouth eventually leads to resenting the game.