So at this point, treasure was the fuel to let you acquire magical items, which became a separate "xp track" of their own- in addition to what your levels got you, you could funnel gold acquired into purchasing items. At low levels this was your plate armor and masterwork swords, but eventually this led into utility items, consumables, and eventually bonuses to attack, damage, AC, and saves.
Unfortunately, despite multiple efforts, 3e's attempt to make item creation a fundamental part of the game led to busted and overpriced items. 4e decided to continue with the process of turning treasure into power, but took a more conservative approach to magic items, and removed custom item creation from the equation.