I really like this change from the perspective of immersion. Most RPGs do not soulbind items, and when I started playing Warcraft, soulbinding felt pretty heavy handed. I mean, I can see a tattoo being soulbound. But a sword? A pair of boots? Why can't I hand it to someone else when I am done with it? This game has "world" in the title, but I can't even hand half the items from one player to another?
On the other hand, how will Diablo III handle the resulting crash in market prices? As things stand right now, the best way to gear up is to buy items on the auction house. Most drops you find in game are only for sharding, and the few that aren't are going to have sub-optimal stats, so you'll sell them. A large chunk of the game is thus nearly irrelevant. In the early game, you can buy ridiculously powerful items for cheap, so a large part of the game--drops and crafting--are just not important.
The best solutions I can think of involve making the price of low-level items higher when bought off the auction house. Either raise the auction house fees, or raise the vendor-selling prices for low-level items. As things stand, I like the mechanics of the auction house, but the prices seem bad for generating the best game experience.