Well, 3rd Edition D&D. That is when they added wealth-by-level and started assuming certain +'s in the math at certain levels.

Obviously it didn't work out terribly well. It emphasizes certain "important" items over trinkets and things with less directly useful effects. It encourages you to pull out every gold filling to avoid falling behind. It helps create magic item Christmas trees. But it was a nice idea.

As for why people say certain items are required for certain builds, it is kind of like how Power Attack is "required" for a two-handed Fighter. Sure, you can theoretically skip it, but it is so useful there is little reason to. Similarly, until recently an agile dagger was the only way to get dex-to-damage on a dagger, which really was a vital part of lots of dagger builds. It isn't frosting, it is like the sugar in the mix or something.

I agree, it would be nice to go back to the drawing board. There are lots of interesting ideas, like limiting the number of items you can use, items as advancement, or changing economies as you go on (so you can trade weak items for weak items, but generally people won't want to trade a powerful item for a bag of weak ones or gold or whatever). It is a thing to think about in future editions.

However, within the paradigm of the system that exists, that doesn't really work out. Sure, you can ignore your agile sword and invest in flying carpet futures instead, but your abilities will end up drastically lower than the game assumes for your level and you may well have trouble with CR appropriate challenges. It can be made to work, but like deciding to not take Power Attack it can throw off expected values and require significant additional work to make work smoothly.