Didn't this change with Essentials?
Maybe - I'm not an expert on this aspect of Essentials. As I understand it, the rarity rules in Essentials changed the treasure parcel rules. I think wishlists are still expected, however, except for Rare items. So I would see it as closer to a change to hit point rolls in place of fixed hp per level, rather than something more fundamental (Rare items being an exception here).
by treating character wealth as equivalent to a character's Base Attack Bonus (etc), part of the character, it creates an expectation that the GM will hand out wealth in-world. This rubs some people (me included) the wrong way.
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It hits my versimiltude meter, and you know I value world-sim play.
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I like treasure as an in-world reward; something you may or may not gain based on in-world events.
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My own preference in 4e is to use Inherent bonuses and leave treasure acquisition entirely to the Fates.
That makes sense - especially if you use pre-Essentials daily item limits to control excessive item reliance.
In my game I don't use inherent bonuses but use the "level up items" option from Adventurer's Vault - so the number of genuinely new items discovered is fairly low. An exception is the Rod of 7 Parts, which can't level up without a new part being discovered, but who is surprised that an adventurer bearing the Rod should periodically find himself coming across new bits ot it?
It may be hard to distinguish treasure parcels from increasing BAB, but that confusion only happens when viewing 4e. So to a non-4e player, treasure parcels are seen as 'player entitlement' because an increasing BAB exists in every edition.
I don't really follow this.
S'mon's dislike of the 4e approach makes sense to me (though I don't personally share it) - he wants the GM to have control over the ingame stuff, and to manage that in a world-sim style, and therefore doesn't want the players to be able to inject their own preferences into it, which may well be arbitrary relative to the established fiction of the world. He also has a mechanical solution: inherent bonuses, which give PCs the enhancement bonuses the game's mechanics require without impinging on the ingame fiction in the way items do.
But someone who looks at 4e and judges it wrong just because it has mechanical featuers - like an assumption of enhancement bonuses - that other editions don't - simply looks ignorant to me. It's like saying that 3E must be broken because a high level fighter can have 200 hp, which an AD&D PC couldn't have: ie wrongly projecting the framework of one edtion onto a different mechanical system.