We’re of the philosophy that, if there is a market for some fun, virtual flavor items which can be purchased using real-world cash to aesthetically enhance a player’s character in a way they deem valuable, we’ll provide that service. So far the virtual pet store has been very successful in this regard. Some players might think it’s ridiculous to spend real money on a virtual pet that serves no gameplay purpose, so they can easily choose not to invest in that market. There’s a very important distinction here though. If a person deems a virtual item not to be worth its value in real money, that person is not negatively impacted when someone else feels differently and runs around in the game with the virtual item on display.

It’s an important part of the philosophy that, while we will expand the market for those who are willing to purchase with real money virtual flavor items, we want to avoid selling direct combat advantages to people. We want players to want to play the game to set themselves apart from other players, get more powerful items, or obtain in-game wealth. The reasons for playing the game become almost completely compromised if the best gear rewards for continuing to play can just be bought. (Source)