I did go inside it, and it wasn't abandoned. I had been busy spamming dungeons and participating in gates at the golden saucer during the moogle and golden saucer events, so I was just too busy to revisit it the past 3 weeks. Someone suggested that I write an email to SE, I don't think SE can do anything about me having lost the house but perhaps they can investigate why the house got flagged in the first place.
As for why others do it they do it to monopolise the land until someone gives them a bigger offer to buy it off them, usually with medium and large plots. I've heard of people buying large plots from others for 50k. Some people also do it to monopolise entire wards just because they can.

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