One could make a very strong argument that it doesn't, as long as there are non-cash avenues to acquire the same gear. The exception is PVP, where players are in direct competition with each other.
That's how people in TOR's targeted player base naturally react to the selling of top end pv/pve gear. In all probability, a substantial portion of the population would quit the game should it become straightforward end game p2win. Unfortunately, in all probability a straightforward end game p2win model is more profitable given an MMO drops below a certain population threshhold. If end game p2win comes, a lot of long timers and new players alike will leave. The game will almost certainly survive for years afterwards, but there's no denying that a substantial group of people would be displeased with the model change.