Pretend for a second that this wasn't ebay.
I go to best buy and start looking at TVs. I find one that is pretty cool, will be great for playing wii fit on, can't wait to get it home, and I tell the sales-person that I'd like to buy it.
On the way to the register, I realize "Wait a second, I'm living check to check and rent is due tomorrow. I can't afford a freaking new TV!", so I look at the sales person and say "Oh, I...this is embarrassing, but I actually can't afford this television at all. I'm really sorry."
Would Best Buy be in the right here if they sent somebody up to me to tell me "Wow, that is a really cool TV you just bought! My daughter realllly wants that exact TV for her dorm room and you totally bought the last one! I'll buy it from you for $1000!"?
Absolutely not. In fact, there would probably be a lawsuit involved.
Was it a crappy thing to do to try and back out of an auction like that? Yes, absolutely, but it was an even worse thing to scam the woman out of money that she said she didn't have.
Bad moves all around, in my opinion.
Edit: wow, reading these reddit comments is really, really disheartening.
edit2: I'm not saying that what the women did was okay. She will probably be banned from ebay. This is fine, this is what should happen. Guys, we teach children that two wrongs don't make a right, don't we? Is there a reason we teach them this or do we just like the phrase because it rhymes?