Recently Kaivax eloborated a bit on the drop rates of rares. Apparently you are guaranteed a random rare and a class rare on your first kill on normal difficulty.
Any other boss kills on any other difficulty reverts you back to a standard loot drop table. You still have a chance to get rare loot, it’s just smaller than on your first run. It is still pretty decent, you just aren’t guaranteed anything.
This makes pretty good sense. Your first run on normal through Diablo 3 is just to get your feet wet. By increasing the value of the loot relatively, people are sucked in to the game and will stay interested once it starts get progressively more difficult.
Interesting. Maybe powering alts through Normal to collect rares to sell will be something people do.