I have simple list:
  A     B
item1   3
item2   2
item3   4
item4   1
Need to output:
  A
item1
item1
item1
item2
item2
item3
item3
item3
item3
item4
Here is one way of doing it without VBA:
1 in A1=A1+C1 in A2 and copy down to A5') in the cell1 in E1, a 2 in E2, and copy down as to get 1, 2, ..., 10=VLOOKUP(E1,$A$1:$B$5,2) in F1 and copy down.It should look like this:
| A  | B     | C | D | E  | F     |
|----|-------|---|---|----|-------|
| 1  | item1 | 3 |   | 1  | item1 |
| 4  | item2 | 2 |   | 2  | item1 |
| 6  | item3 | 4 |   | 3  | item1 |
| 10 | item4 | 1 |   | 4  | item2 |
| 11 |       |   |   | 5  | item2 |
|    |       |   |   | 6  | item3 |
|    |       |   |   | 7  | item3 |
|    |       |   |   | 8  | item3 |
|    |       |   |   | 9  | item3 |
|    |       |   |   | 10 | item4 |
Here's the VBA solution. I don't quite understand the comment that VBA won't be dynamic. It's as dynamic as you make it, just like a formula. Note that this macro will erase all data on Sheet1 and replace it with the new output. If you want the desired output on a different sheet, then change the reference to Sheet2 or what have you.
Option Explicit
Sub MultiCopy()
Dim arr As Variant
Dim r As Range
Dim i As Long
Dim currRow As Long
Dim nCopy As Long
Dim item As String
'store cell values in array
arr = Sheet1.UsedRange
currRow = 2
'remove all values
Sheet1.Cells.ClearContents
Sheet1.Range("A1") = "A"
For i = 2 To UBound(arr, 1)
    item = arr(i, 1)
    nCopy = arr(i, 2) - 1
    If nCopy > -1 Then
        Sheet1.Range("A" & currRow & ":A" & (currRow + nCopy)).Value = item
        currRow = currRow + nCopy + 1
    End If
Next
End Sub
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