I must say I’m impressed with the result (see below). Not Blizzard though. Jay Wilson, designer for Diablo 3 speaks out:

Now in terms of the actual texturing, this texturing, where they grayed out everything and it’s very flat and the monsters are all kind of a similar tone — that does not play well. It’s very boring to run through more than a couple of times, and it’s very difficult to tell creatures apart and pop them out of the environment. So those things don’t really work for us. A lot of the lighting stuff I think is very cool, but it’s also not very doable for us.

Let me know what you think. I understand these shadows can be tough to do in a 3D engine but let’s not forget Diablo 3 is supposed to be gothic horror, not cartoon-like fantasy like WoW!