There's so many things that this could ruin, I don't even know where to start.
As an example let's do some quick maths. Baal drops 6 items on death. 3-4 of these items are rare+ and worth picking up. With 8 players in the game, that's 0.5 items per kill per player, or 1 item for every 2 Baal kills. That's a fair way to have personal loot without modifying drop rates. That's also terrible, anyone who experiences this will demand increased drop rates, the whole personal loot won't change a god damn thing. You know this tells me? People who are asking for personal loot haven't even bothered doing this simple calculation to realize that it's a terrible idea. I can already see people leeching AFK baalruns, because why fight if you know you have guaranteed items at the end of the run?
Regardless of how they choose to implement this feature, it's impact on the game will ripple like a wave. It's effect on botting is hard to predict but it might make it significantly more prevalent.
What happens if they make 8-player group MF actually more viable than other methods? Well, my first expectation is that the current MF or rune-finding strategies will immediately become suboptimal compared to group play. Just like Diablo 3, you HAVE to play in an optimized 4 player group or else your Paragon acquisition speed is greatly diminished and I'm talking probably 1000% slower. So it stands to reason that you will have to either make optimal 8 player groups like mini-WoW raids when farming, or suffer.
There's also the psychological side of things. Sometimes you're in a game where you feel you can be relaxed and people might even share loot because their mules are full. You might even make a friend in the process. Other times you have to sit on the edge of your seat in order to catch an item. You might see a cool item drop and start a conversation with a player, maybe end up trading. Personal loot sterilizes the game from any such interactions. The game becomes a bunch of single-players in their own instance-bubbles playing on the same screen.
I saw this post on the D2R forum and it really resonated with me:
I really hope they don't touch loot.
-EDIT:
It's ok, his inboxed got exploded...