Lord of the Rings Online - Ask Turbine #3 @ WarCry

Mattlow: Where will the best loot in the game come from? Crafters or from monsters.

Jeffrey Steefel: We want players to have lots of opportunities to get the fat loot. So, obviously, the mastery level, which is the highest tier of crafting, will come up with some of that loot that you're going to be able to buy at auction if the seller is nice or greedy enough. Also, in our raids and in the high-end stepped instances - where you're going to encounter some of the bigger bosses - and also in some areas of the Ettenmoors, which are the monster play areas, you're going to encounter some pretty hefty loot.