From Diablo Wiki
Diablo 3 Legendary Archive
Information about Legendary items during Diablo 3's development and then after release.
2008: Unique to Legendary
The top tier of items in Diablo 1 and Diablo 2 were called "Unique." Diablo 3 changed the term to "Legendary" and this prompted some debate and
Bashiok gave some explanations for the item name change in a forum post in October 2010: 
- Why else would they rename the Unique items to Legendary?
- Bashiok: Unique items in Diablo II were only “unique” in that only one of them would drop per-game. Using the term “unique” to describe them implies many things, none of which are likely to be true.
- World of Warcraft uses the word a bit more intelligently in that it is indeed unique in that your character can only ever have one of them.
- Because they will be using the same “Unique” setup that WoW uses
- Bashiok: We have no plans to have such a system.
- World of Warcraft uses unique and unique equipped for character balance, so that the designers know what items a character can have equipped at any one time. Balance is important to us, but probably not to the same degree that we would want to restrict use of dual-wielding two of some awesome legendary sword. For instance.
- ...I guess I would probably follow that up with the usual, ‘but nothing is set in stone’. I guess if we were to hit a point where dual wielding the most awesome sword in the game completely broke everything, we’d have to do something like unique-equipped.
- But even then, you could still find them, pick them up, and trade them off… so I’m not even sure how unique-equipped kills hoarding.
Fan reaction to this change has been negative to indifferent. Diablo players have come to love Unique items and the golden text that identifies them. The first dictionary definition of "unique" does mean "one of a kind" but the other meanings just mean "special," so it's not that misleading of a term.
The name is created by the usage in the game, and everyone playing soon knows what unique means. Besides, if they're going to be literal, doesn't this mean that they need a whole lore story for every "legendary" item, or else that name is no more accurate than "unique?" In regards to that question, there still remains many legendary items which, via their description, should be unique, such as Tal Rasha's Lidless Eye (db). In the end, however, this is merely semantics and nostalgia at work.
Legendary Item Appearance
Most legendary pieces of armor do not have a unique model, but are rather a re-skinned version of an existing normal armor piece (most often the "balor" item set, or otherwise the "warlord" item set). Sometimes an item, such as Ice Climbers, will simply be colored blue, and that is the only way to signify their difference from a standard, non-legendary item. This includes set items, as well.
2009: Fans Suggest Legendary Names
Blizzard asked for fans to suggest names for Diablo 3 Legendary Items via their @Diablo twitter account in 2009. The contest rewarded 100 of the best Unique name suggestions with a Diablo pin, with five of the best names promised to be used in the game. They never confirmed which five were chosen, but some of the suggestions were:
- Havenrow Skin Peeler, by KarlGrande
- Belial’s Wrath, by Kastrien
- Staff of the Sightless Eye, by Frostblind
- Elzix’s Misfortune, by ChrisEngine357
- Deckard’s Cane, by ClakyDruott
- Archivist’s Scroll, by Maelnison
- Axe of Assimilation, by ScottGallupe
- Que Hegan’s Zeal, by forbrukerombud
- Crown of Divine Right, by MShaneman
- Lord Telrandan’s Hand, by Erignmatic (Reworked to Telranden's Hand in the game.)
- Skull Crusher of Demise, by ravenneangelle
2011: Early Legendary Examples
Early legendary item examples were shown off at GamesCom 2011. They were basically just stat sticks in those early iterations, with offensive stats like +damage and +Attack Speed on most of the items previewed.
Armor of Lucien, Legendary Chest Armor 624 Armor
- +0.37 Attacks Per Second
- +23% Damage
- +269% Armor
- +25 Cold Resistance
- +45 Attack
- Requires: Level 60
- Durability: 25
- Sell price: 1,405
2011-2012: Diablo 3's Early Legendary Disappointment
Legendary items were badly designed, underpowered, and boring in Diablo 3, in the opinion of most players. The developers eventually came to agree, at least judging by the total system overhaul and improvement in Loot 2.0. The problem with underwhelming legendaries was obvious from the early going, with fans pointing it out as soon as the official game guide went live in early 2012. The issue grew more dramatic shortly after Diablo 3's launch May 2012, as the first players into Inferno began finding blue weapons that had considerably higher damage than the best of the legendary items.
The screen below is from shortly after D3's launch and it compares a legendary weapon from the database vs. an actual blue item, and weapons with over 1000 damage were not uncommon in that time frame.
Legendary items are commonly not going to be the best items. It’s a title that denotes a named item, with set stats, and a unique model. It does not mean they’re the best items. Completely random rares will be the best items in the game if they roll up the right stats.
The problem is legendary items are complete garbage currently. It was fun to find a great legendary in D2. It is no fun to find rares. It isn’t hard to understand, legendaries should be much, much better then they are, and there should be more of them.
Common, Blue weapons having double the damage on them then the “best” legendary weapons is a broken design, if your goal is to make a fun game.
I will take that feedback. Thank you.
As to the “more of them”, Diablo III at launch has more Legendaries than Diablo II had at launch. I’m sure we’ll add more as time goes on, but I do not agree that we don’t already have a lot.
Loot is messed up, period. This is carrot on a stick gameplay. It’s a simple idea. If most of the time you finally catch a carrot and it’s rotten, eventually you just stop giving chase.If you’d like to give any specifics I’d be happy to write them down.
This philosophy changed over time and was completely removed during the run up to D3v2 and Reaper of Souls. By then, the theory was that legendary and set items were always going to be BiS and Rares were merely stopgap equipment used during leveling and gradually replaced with higher quality gear once a character reached level the maximum level.
Reaper of Souls Beta Test
Fans were keenly-interested in the legendary and set items found during the Reaper of Souls beta, after legendary items has proven so lame during the early days of Diablo 3, and been greatly improved in Loot 2.0 leading up to Reaper of Souls. For the most part the items did not disappoint, and fans poured over image galleries.
- Legendary Gallery #1: November 24, 2013.
- Legendary Gallery #2: November 27, 2013.
- Legendary Gallery #3: December 4, 2013.
- Legendary Gallery #4: January 31, 2014.
Millions of images of legendary items can be seen online, with many galleries posted during the game's development.
Reaper of Souls:
- RoS Beta Legendary Gallery #1: November 24, 2013.
- RoS Beta Legendary Gallery #2: November 27, 2013.
- RoS Beta Legendary Gallery #3: December 4, 2013.
- RoS Beta Legendary Gallery #4: January 31, 2014.