"eBay has the choice of allowing users to protect the bidders, or setting up other ways of dealing with clearly fraudulent descriptions. I think ebay made the wiser choice."

Michael, do you really want to own that statement?

You say that Ebay has set up other ways of dealing with clearly fraudulent descriptions. What are those ways. They apparently do nothing as evidenced by the language in their gutless response

"We would also like to explain eBay's policy
with respect to reports like yours. eBay is not in a position to make
judgments about the authenticity or authorized nature of auction items,
except in the most extreme circumstances. This may mean that we cannot
remove the item about which you contacted us. In some cases, we refer
the information to the owner of the rights (copyright, trademark, etc.)
involved, if we know who they are and how to contact them."

So by Ebay's own admission they have no way of dealing with clearly fraudulent descriptions. They do appear to have a means of dealing with copyright or trademark infringement.

Of course the reason for this is that the likelihood of legal action agaisnt ebay over a frauunt descrription is pretty small. The risk of significant liability and legal expenses in a battle over trademark or copyright rights is enough to make Ebay actually take steps to prevent it.

I think that Jim is right on the money on his analysis but i'll leave it to him to reply to your other points.