I think the fact is, that some people have the patience to wait six months or even a year, maybe bidding on and losing a handful of auctions until they get the item at the price they want to pay.
This won't work with items that have big demand, like PPC cards, but you might be able to wait, and I mean WAIT, for one with a more reasonable price - the price that is the 'best of a bad bunch'.
As to people selling items on ebay and getting ridiculous prices for them - as I've said before, "We all gotta pay the rent" - that's pretty much the only reason I would sell my stuff...
[of course there are people in it purely to make money as well, i.e. they buy and sell]