I know, a year late, just wanted to say, nice catch there. Hearthstone online game it is.

I didn’t say “drop”, I said “make” … a goblin culture that crafts and manufactures would be interesting.

Sounds a lot like “By The Book.” It’s a story about a gang of goblins that find “The Adventurer’s Handbook”, which sounds a lot like a D&D Guidebook and decide to be the ones getting the loot.
http://www.btbcomic.com/

Either goblins can mine+craft their own gear or they loot humans/orcs/etc and only elves are skilled enough to kill them.

Or its like Strip #8 where they spontaneously generate stuff. Explains why goblins would carry and/or want armor they are too small to wear.

They’re monsters, monsters drop loot. For examples, take the shower slime or the basement dungeon.

RPG economics!