How to Decentralize Ul'dah

[Technolust]

But then why not just let people buy that item direct from the item search menu instead of having to go into the MW in the first place?

I would tend to believe that the reason this isn't possible right now is because of the way the game was coded/designed. Since the entire dynamic of the game was based upon selling stuff through retainers/markets, I would tend to think that the baseline code is not setup to deal with an auction house. Some of the features of the game, and the way they have made changes makes me believe that this is the case.