from a user's perspective, i would much rather use the tools and software provided by a capable team that caters to my needs. that said, you don't really need a brilliant team, just one that does the job better than other current competitors. this is a great opportunity that aligns well with the strengths of the founders.
There are a million reasons why Auctomatic shouldn't bother, but if they are a great team you'll never be able to convince them of that.
I suppose their plan is to have ebay buy them out, and given that they've spent so little, a nice seven figure sum might work for all parties.
Then again, how open is ebay to something like this? Other sites don't mind if you use their api to make enhancements, but is ebay one of them?
http://www.projectsandimas.com/
Good luck beating this... it's a dream app. I've seen it demoed and power sellers were all drooling.
PayPal kicked ass, why not Auctomatic? May not be the best comparison, but one thing paypal taught us is that the idea of "ownership of users" is very blurred.
You make a very good point, Auctomatic may really have their work cut out for them. But that's what makes it fun, right?