Can't have offline play without storing everything client-side. A lot more has to be changed to allow offline play; it's not as simple as just saying "Characters are stored on your computer instead of ours."
Since everything is on Blizzard's servers, not only is it harder to hack, it's harder to test too. This means hackers either have to:
1. Create their own emulation of Diablo 3, which is very hard to do since it's an online game. WoW for example is 7 years old, and still struggles to have anybody "truly" emulate the game without being ridden with bugs, lag issues, etc.
2. Test it on Blizzard's servers, which is very easy for Blizzard to detect and ban.
So yes, it does make hackers have a much more difficult time to mess up the game.
^All of this, exactly.
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^All of this, exactly.