Diablo 2 drops were determined on spawn. Not saying it's the same here.

Once the world is spawned, as far as how much it takes out of the server is concerned, it doesn't matter whether loot is determined at spawn or kill. Everything that is killed gets respawned, so it either determines the loot at the kill or the spawn. The only extra is what isn't killed. A problem with generating at kill is it needs to be generated right away. If it is at spawn, you can just delay the spawn without much problem.