The Retainer system and the standard AH system both have their benefits.

The AH employs a simple approach to selling, buying, shopping, etc., requiring a minimal amount of steps to perform mundane functions.

The Retainer system is more robust in that retainers can hold items (acting as a sort've Bank) as well as sell them on the Bazaar. Additional functionality can also be added in the future as well.

Ultimately, the Retainer system is not nearly as efficient as an economy driven by an AH system, simply because employing a retainer requires about 5 times as many steps. First, you have to give the retainer your items to hold, then jump into another menu and designate which of those items you want to sell (though I don't think this would be an issue if the UI wasn't still.....so......laggy...). Lastly (and most important), in order to buy from retainers you have to actually be right next to them, whereas in an AH system you can purchase from any major city as long as its economy is connected to the other cities.

And herein lies the true MAJOR flaw of the retainer system: The Retainer system is inherently a collection of closed economies. Because of this fact, the heart of the economy will now slowly start to favor one city over another. Although this sandbox possibility sounds good on paper, it is absolutely awful for both players and the developpers because it ultimately results in alot of content being thrown away.

This effect is easily seen when you examine the progression of the city-state populations in the game, and how they have evolved over time. When I started playing (around December), I began in Gridania, the zone which seemed the most interesting to me. At the time, it wasn't exactly a bustling metropolis, but you could still find maybe 20-40 people hanging out in the city at the same time. However, over time this number became almost 0 as players began flocking to Uld'ah... Why? Because Uld'ah had become the extreme center of the world's economy, since it had the easiest leveling content (Coblyns) as well as the most ideal position of the three city-states. Consequently, there is now really no reason, outside of filling out guildleves or picking up guild quests, to even go to Gridania. Over time I have also began to see this happen to Limsa Lominsa as well (on a slightly less accelerated scale).