Well - again, I'm not sure he's ripping anyone off, as nobody was actually forced to buy at a higher price than they were willing to pay, were they? And it's not like the item is a necessity for anyone or that he is the only source.
I don't really see any moral difference between coming on here and saying "I'm not selling item X for less than £Y" and putting the same item on eBay and bidding it up to £Y anyway - either way, if no-one is willing to pay Y, then no-one will be buying it either way. I don't see any real difference between bidding an item up to £Y or opening an auction at £Y straight away.
But if the practice is against eBay rules, then that's another matter (sorry - wasn't aware - I don't use eBay myself and I must have overlooked Michael's post). Shouldn't be done. 'nuff said.