I too am astounded (and since I sell casually on eBay, happy also
) at the prices people will sometimes pay for things on eBay that are available "commercially" elsewhere for less. I can only attribute it to one or all of the ideas mentioned by others: auction fever, not being willing to take the time to do a bit of price research, not knowing about shopping bots like Pricegrabber, geo restrictions, "hidden" discounts, etc. etc.
With that said, I have also bought a couple of e-readers from eBay, but NOT for more than I could have gotten them for elsewhere. If you watch carefully and patiently - and it takes effort that not everyone may enjoy or have time for - you can find good deals in amongst the over-priced ones. In my case, both e-readers were "Buy It Now" deals that were listed at a low price that I jumped on right away. And then going through eBates and getting the eBay Bucks took another few dollars off the price too - not much more but WTH...
And one other place that eBay shines, for me at least, IS in older technology, when sometimes I may NOT want the newer technology. I bought two XP laptops on eBay before finally giving in and buying a new Windows 7 one from a bricks and mortar store, and thus was able to skip the whole "Vista" disaster. And, since I am not a fan of touch screens, I could imagine going to eBay for another PRS-300 if mine were to break or get lost or stolen, rather than buying a PRS-350.
Anyway, just my thoughts...