Good question – how to fix it
I have to admit, its nice to take some awesome loot item and give it to a low level char to twink it up have have fun.
So I would hate to see that ability go.
And I doubt you can put some type of moral check on players so that only the “good” ones can play.
Which leaves having items as no drop, or extreme class specific.
Maybe in a group, you only get one need, until everyone in the group has done a need? probably difficult to enforce that, and somewhat easy to get around by reforming groups.
I guess in the end, there isn’t really much you can do. Just hope people use Greed instead of need as the default.