My suggestion is: have an option in the Game tab of the options (F11) to enable the loot to be automatically picked up whenever it's dropped (if there's room in the inventory of course). This option would be unticked by default (same behavior as currently) and one could drop items he doesn't like (but I guess he would untick the option if it was too annoying, i.e. when inventory is almost full at the beginning of an instance).
I guess on the one hand it would make things a bit too easy for bots, but on the other hand it'd be nicer for real players too

Opinions?