This seems all correct, but I wonder how on earth the economy of Guild Wars 2 should get to a reasonable standard then. Almost every item I checked seems to be sold in the hundreds, if not thousands/ten-thousands, and every new seller tries to match or undermine the current lowest price. With all servers in one auction house, there seems be be way more supply than demand on most items, even the supposedly 'rare' ones, and I don't see a way how the economy could ever recover from this.
Dunno, maybe I'm missing something or overthinking it in general, but when a piece of copper ore is more valuable than a level 55 green, I'm kinda wondering.
You say recover, as if there were ever a different version of the TP that didn't function this way. Maybe this is just how the TP is and will always be. I think I prefer the TP as it is right now. Relatively friendly to the more casual players. You don't have to worry about getting price gouged by a level 80 that has all the time in the world to farm stuff.
The only thing that boggles my mind are the idiots posting prices that, when combined with the listing fee, will net them LESS coin than simply vendoring the item.