Your trying to justify that listing fees is the lesser of the two evils, the current market and the listing fee market, but I'm telling you, listing fees is a greater evil then the current one.
In the current one you have an opportunity to battle high commodity players on the same turf all the way to the cost price of producing goods because their isn't a penalty. While in listing fees, you get knocked out instantly, you don't even get a chance. The difference is, atleast you can make your money back, while in listing fees, they will push you to a guaranteed loss.
Trying to say listing fees can slowly lower the rate of undercutting appears logical but it isn't. If people see the market looks it is going to be flooded, the first thing a person will do is drop his prices instantly to the minimum profit margin. They aren't going to play 1 gil undercuts with you because the first person to lock in at the minimum profit margin wins, cause everyone else is guaranteed a loss if they relist. People look at this market and see a 1 gil profit margin and leave. Many argue that these people are stupid but they aren't. They have huge commodity behind them. They can sit in this market for a long time. Even though they make a 1 gil profit only, its still covers the cost to make the item and 1 gil on top. While a person who has sold nothing makes nothing to cover the cost of making the item and therefore cannot stay in the market, eventually, making you leave the market. The player then raises his prices back up and continues on and will rinse and repeat as needed to kick people out.
Your trying to argue that these type of people are going to sit here and undercut you slowly when they know if they bring it to the point where you take a loss, you won't undercut because you face losses. At this point you are forced out of the market. These people do not follow the lets undercut by 1 gil or undercut reasonably because they have listing fees as a tool on their belt, that allows them to kick people out of markets, specifically players with small commodities.
I am not joking when I say if we implement listing fees, we give these players one crazy tool to use and abuse.
Your hoping people nicely undercut or slowly deter undercutting but because players know they can force people out of the market with listing fees, they aren't even going to slowly undercut you, they get straight to the point because first person there wins.
The market boards are a battle ground for merchants. This is why some of us enjoy sitting on the market boards. Its our style of endgame content. Some end-game merchants won't tolerate your intrusion on their market and if they had listing fees to back them up, your pretty much out of the market the instant you decided to enter his market. On top of the fact, you even lose gil for just coming on board, "thanks listing fee"~
While in the current market, these players do not have a way to corner you in the markets or kick you out. The best they can do is slowly undercut you to make sure they get the maximum amount of gil.
You have to keep in mind. The people undercutting you now, weren't thinking about your losses and gain when they undercut you. What makes you think they are going to play nice when we give them listing fees and the ability to totally remove all their competition?
We can have 100's of nice players, but it only takes 1 to lock an entire market.