All the older editions of D&D, but OD&D in particular, did a very poor job of explaining this, but it seems indisputably correct. You might go so far as to say that XP for treasure is the underlying but unstated assumption on which D&D is founded.
AD&D 2nd edition did not have this mechanism. Reading through the DMG, indeed, it is rather striking that the only time XP is supposed to be awarded for treasure is as an individual class award for Rogues. XP, in general, is recommended to be given for the following reasons:
- Fun. XP is for rewarding player involvement and making the game enjoyable for others (including, implicitly, the DM). It is correspondingly to be withheld if the players are disruptive or inactive.
- Survival. Simply by the PC surviving from session to session, he or she should gain XP.
- Improvement. As players learn how to play the game better (the text states "players should also improve by trying to play more intelligently each session") their characters should be awarded XP. I'm reminded once again of Zeb Cook's exhortation to always try to improve as a player and DM.
It will be noted that two of these categories, 1 and 3, are totally external to the game world itself, and 2 is only partially connected to it. They are primarily meta-gaming awards. And they give the lie to the idea that the DM's job is to make the game fun for the players. Indeed, the "tyranny of fun", if anything, cuts in the other direction: it's up to the players to be the heart of things in that regard. It's their job to do interesting things and get involved, and it's their job to get better and better at playing D&D. I wholeheartedly approve.
There are also, of course, group awards (for defeating enemies and for "story goals" like rescuing the princess or whatever) and the aforementioned class awards. These latter are as follows:
- In general, XP is awarded when a player has a clever idea, role plays well, or encourages others to participate
- Warriors gain XP for individually defeating monsters
- Wizards gain XP for using spells intelligently, researching spells, making magic items, and so on
- Priests gain XP for using granted powers and "furthering [their] ethos"
- Rogues gain XP for using their special abilities (i.e. thief skills and bard abilities) and getting treasure
What is the underlying game for AD&D 2nd edition, then? Surprisingly, given the reputation the edition has for a) focusing on plot/story rather than strategy/tactics; and b) softening the approach of older editions, you might say that, if anything, the XP mechanism for 2e is primarily concerned with player skill.
In that sense, it is not so far removed from the approach of the past, given that gaining treasure was, to a large degree, a clear measure of success and, hence, player skill. But the 2nd edition mechanism is more holistic; it aims to reward not just in-games success but also the more intangible elements of gaming success - doing stuff, getting involved, making the experience worthwhile for all concerned. That seems to be nested in a set of assumptions about players, and would also perhaps be seen as incentivising paternalism in the DM. But nonetheless, it is of interest to me as somebody who grew up playing 2nd edition but piledrivered XP for gold and monster kills. Lying between the two stools of New and Old Schools, 2nd edition remains almost totally ignored and very much under-theorized, which I don't doubt does it something of a disservice.