In http://www.exiledkingdoms.com/forum/viewtopic.php?f=5&t=308&p=1284 David's post implies that it's intentional. The chests not working after the boss is killed/fire shard is used (even if they were never looted before) is a bug that seems to have never gotten fixed. As it is, if you don't clear out the dungeon first, you lose all that loot.
It is meant as a one-time dungeon, too close to a free bed to allow grinding without being imbalanced. There is no important loot other than the quest item in it.
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