Before The Burning Crusade, there simply wasn't any other way to get gear for your character but for it to drop past a certain point. Sometimes you could buy a BoE piece on the auction house - my first epic was a Brain Hacker my wife bought me on the AH. But in general, if you wanted a piece of gear, you farmed for it. You ran dungeons over and over again, hoping a piece would drop, and hoping you would win the roll - and if neither of those things happened, you just kept running. It was possible to run the same dungeon every day, over and over again, and never get that drop you wanted - one friend of mine never completed his dungeon set, even when he was working on raiding Ahn'Qiraj, because the shoulders simply would not drop.
But during BC the Badges of Justice were devised, and for the first time players had a way to get around the luck of the draw. Over the course of the expansion, new gear was placed on vendors, gear that could be purchased for Badges, and this meant that players kept running as much content that dropped those badges as possible. It's fair to say that the badge system kept Karazhan going as a desired raiding location - people would bring their geared mains, even, just to get the extra badges. When the Isle of Quel'Danas vendor opened, all of my friends and guildmates (who were raiding TK and SSC and moving up into Hyjal and the Black Temple) picked up gear from the IoQD vendor, because it was easily as good if not slightly better as the drops we already had. It filled weak spots (those pants or boots or belt that never dropped) or provided us with weapons absolutely as good as drops we hadn't even seen yet.
The badge system got ever more complex in Wrath, with each new raid tier also seeing the debut of a new type of badge and new gear that badge could be spent on. As a result, the two tiered point system (justice and valor points, honor and conquest points for PvP) was introduced in Cataclysm (technically, during the tail end of Wrath) to simplify everything. It worked, to a point. Now, in Mists of Pandaria, we've seen justice and valor points be superseded by the bonus roll mechanic, one that will be revamped in Warlords of Draenor. One could argue that the bonus roll system puts the emphasis back on whether or not an item drops as opposed to simply collecting points to buy an item - it removes the certainty of reaching enough points to make a purchase, as well.