The Starter Edition is a limited demo providing access up to the Skeleton King boss in Act 1 and imposes a cap at level 13. It also prevents access to the real money auction house and global play on other region servers.
Blizzard has not provided an explanation for why it is locking legitimate purchasers out of its game, but it is suspected to be a measure to counter pirated copies of the game and fraudulent access to the real money auction house. The 72-hour period will presumably to enable Blizzard to verify that each account is legitimate.
The restriction does not apply to physical retail copies of the game.