Jeremy, the example you gave is a decent one. From what I observed for the past few years, the unhealthy culture now is:
1) In a way, it is more of a buyers' market now, this pressured most sellers to lower their selling price. Looks like this is the general feeling we all had now.
2) The mentality that used gear should be priced at 50% of the retail price. And this is regardless of the condition of the gear.
3) The effects of big sales. Sellers who did not buy their gears during sale suffer in some ways.
I was trying to sell my Marshall RG-1 I bought 1st-hand from Davis some months ago. Davis was selling it at $170 back then, and I priced mine at $120, which is 70% of the retail price. Mine was in mint condition, played less than 10 times. Guess what? i couldn't find a buyer. Those buyers who contacted me wanted me to lower it to $100, $90, $80...
I was in no hurry to sell the pedal, decided to keep it, so that I don't loose so much money because of the lousy market. hifi is right, don't gear hop too much.
Lowballers aren't just coming from the students. I got pressured by lowballer uncle before, uncle who drove big car... I couldn't believe it till I met one... Lowballing is a mindset.
If you think the musical instruments market is bad, check this out:
http://forums.vr-zone.com/forumdisplay.php?f=10
IMO, the computer/electronics market is more scary... maybe because such products' lifetime is shorter.
So far, I think highballing is not a big issue, lowballing is...