I agree with the OP. It's chickenshit to list on Ebay and refuse to honor the highest bid--that's what an auction is--that's the risk you take to sell via auction. The person listing can set the opening bid. If they set it for less money than they would sell it for then they are risking selling it for less money. Doing what this person did also cheats Ebay out of their fees. It lacks integrity all around. I would definitely beware of this seller--by their actions they are a cheater and a liar.
For those who justify this action of the Seller, are you equally okay with a buyer winning a bid and backing out of the deal because he bid over market value?