You have just brought up one of the greatest problems with eBay. As a huge CYA the sellers always add disclaimers that the bidders should inspect the car but how many bidders ever do?
My gut feeling is that some cars sell for more on eBay than they would on the normal retail market but I have no proof to back that up. I also think that most of the overpaying can be attributed to auction excitement in that people tend to pay more for an object in an auction than they normally would, rather than fraud by the sellers. The bidders just can't let someone beat them and get the thing!! That's why, as a seller, it's normally best to have a low opening bid and let people bid each other up.
There are some dishonest sellers but I think, for the most part, most of them are honest. The person sellilng the black car posted pictures in which you saw frame rail damage and rust holes so if you saw the damage isn't it fair to assume other bidders will see it and at least ask questions or ask for better pictures? Isn't that possibly why the seller posted the pictures of those areas?
You may be right and the seller may be a total crook but unless we have some proof of that I'm going to be a little less cynical. The seller posted the pictures and it really is the bidder's responsibility to ask questions, ask for additional photos or other documentation, and/or inspect the car. I'm not saying the seller can knowingly hide information but anyone looking to spend that kind of money on a 40 year old car should know enough to ask some questions. General questions work fine. Like, "Is there any rust under the car or is there any frame damage?" General questions force the seller to reveal all flaws.
I, like you (and probably most of the people on this site), am totally honest when ever I sell anything to anyone. I try to explain to the the buyer exactly what is good and bad about the item. I just believe that is the best way to do business and the best way to treat people. You know, the whole do-unto-others thing. But I agree with you that some sellers offer very little information up front and hope people don't ask too many questions. Hopefully all sellers will treat the buyers like we do but until that day arrives it's the bidders job to do everything he or she can to know what he or she is buying.