My view on this is probably a bit scewed. I grew up in an around auctions, currently work in an auction, my entire family works in auto auctions.
What happened here isn't even slightly uncommon in our industry, it just comes with the territory. What we sell is cars, thousands of them per week.
If somebody bids on a car, but then doesn't pay up...they don't get the car. They might get thrown into something called a "KO book", which means that they'll be banned from our auction, and everybody else's.
That's it. That's the end of it.
If one of our sellers pulled what this seller did, they would almost certainly be banned from ever doing business with us again.