It's an interesting conundrum.

I believe Price History only exacerbates the problem.

[insert some crazy reason for someone to undercut]
[undercut happens for the entire price history]

Then it gives the impression that no one is willing to pay any price higher than the undercut price.

I'm not sure what would drive a person to buy mats and sell the finished product at a loss price IF they're already level 50.

It would be more understandable if someone gathered the items, crafted a set while gaining EXP, made more sets than desired, and instead of auctioning to an NPC which takes their work out of the system, just wants to get it into a player's hands, auctions it off at break-neck low prices.