And vastly diminish your traffic, which in turn diminishes the universe of potential buyers, which probably results in lower sale prices for goods on your site relative to other sites. Particularly since even an "automated" signup kiosk will increase the cost of a transaction in a way that needs to be passed on in the form of higher fees.
I do like the idea, though. There might be some application where it's worthwhile.
One trick is to see if you can leverage some sort of existing "automated signup kiosk". If only you could, say, ask someone to authenticate by making a transaction at one of several specific local ATM machines, and then query the banks to make sure that transaction is made...
Joining an existing ID system to a PKCS used with the website would be relatively straightforward.
Your point about it reducing the universe of available buyers is true up to a point the variable there is the value of the goods being traded. Confirmed trustworthy identities aren't important if you're selling relatively low value goods, but if you're buying and selling cars, houses or industrial goods it suddenly becomes much more attractive to reduce the pool of buyers to those to on whom some due diligence has already been performed. As always; risk carries a premium.
The basic problem of course is that our current monetary system is not well suited to todays internet.
If I was starting from scratch, I'd probably use rails, and the activescaffold plugin.
However, assuming you want to create an eBay for use in your own site/society/community and competing with eBay is a non-issue, I would do it in the tools that allow building as easily and quickly as possible.
I would use python/django because of simplicity in code style and they are good opensource frameworks for building web apps that incorporate many good paradigms. Others may prefer what is in thier skillset e.g. RoR/.NET/PHP, but that is preference... the auctomatic guys started building in common lisp.
My approach would be KISS, working on the core essence i.e. an auctioning engine, and building iteratively there upon. I would also initially start by looking at what is broken in eBay and what people generally complain about and try to incorporate the learning into my roadmap but still focusing on the core competencies first.
Correct. This is just a small, personal project.
The hardest part of this would be handling the actual payments. The rest of it can be done with whatever you like best.
Edit: After I wrote this, I realize it's pretty similar to Keefe's recommenation