game design - Why do loot drops contain (mostly) useless items?

I was thinking about this and couldn't figure this out. In Diablo you kill enemies and they drop random things. But usually the drops are worthless to you relative to what you already have equipped. Why bother building a drop system that gives you crappy drops? Maybe I'm not communicating my question well so I'll provide an alternative implementation:

Instead of frequently dropping crappy items and rarely dropping good items, why not only rarely drop good items?

I guess that crappy items adds to the addictive-ness somehow, but I don't understand why. Why is dropping crappy items part of the design? What does that add?

Edit: FWIW, I have been referring to Diablo 2 as my reference, not D3. But it's still interesting to see answers explaining why D2 was more addictive.

Answer

Usually, they're not totally worthless. While they're not better than what you have equipped, the items you can' wear can usually be sold or broken down and used in crafting. However, the psychology behind it is interesting.

These small, mostly worthless items are called reinforcers(more). They strengthen desired activity. In this case, playing the game and killing baddies.

Mindless, repetitive tasks are more enjoyable with small frequent rewards, instead of rare large rewards. Giving players a "physical" reward works well, even if it's not worth much. The "physical" part is important. XP or money are really just numbers, not an actual object (in game object) that the player can see. The psychological effect very similar to grinding XP or gold however, it's a reward schedule that keeps the player coming back for more.

Getting these small frequent low interest items, increases the desire to continue playing, since the good reward is right around the corner right? This likely takes advantage of the Gambler's Fallacy.

(source)

This is a big reason people continue to buy scratch off tickets, or continue to pour money into a slot machine. Since they haven't won yet, they believe the probability of winning big is getting larger and larger.

Further, it's expected, and it should be. If players are continuously opening up the loot window, only to find no loot, they're going to stop looking and they're going to stop feeling rewarded. Even something little, not worth much, will show the player that they got something for their effort.