Better gear (blue & purple Uniques) generally drop by act and difficulty level. You won't see purple Uniques in Normal (although a couple of players here have found purples in Normal, but those are extremely rare exceptions). There are charts here on these boards that tell you which Uniques drop according to act and difficulty level. As for good green items, the further along in the game you go, the better they become, but you can obtain greens via drops and vendors. Disabling broken and white items will provide you with better gear from monsters, but as Fozzie said, it means every enemy will be using magical gear, and that can make things harder in the early stages. But yeah, if you choose not to proceed beyond Normal, you'll miss out on all sorts of great gear, and for many players, that's one of the main attractions of games like this. (There are also new bosses that only appear in Epic/Legendary, but I won't spoil that for you in case you decide to go beyond Normal in single-player at some point.)
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