I loved the auctions here, and its sad to see them go. I agree they should be changed but NOT eliminated entirely. A separate thread for auctions from the classifieds would have been a better fix IMO, cut down on classifieds clutter and constant bumps. Auctions should be controlled by the "seller" and wouldn't need mod interference, you get sniped or bid ignored? Oh well its under the "sellers terms". All of the auctions i have participated in were clear and cut on the rules, and if i "felt some type of way" about how things went down, i cant really say much as by placing my bid i agreed to the auction terms.
As for unpaid/shill bidding. Ebay is still plagued by unpayers and shill bidding, so i don't really see how using an offsite auction site will prevent this, and frankly i dont have a solution for this other than go down the list of previous bids until you find someone who pays.
Overall if you are worried about being scammed by someone you dont trust, just pony up the extra 3% on paypal fees and have the piece of mind everything will go smoothly. If the deal falls through, paypal will refund your payment since the seller wont have proof of a parcel (offsite protection, with dealings on GH).
Afterall this is the internet and you can't trust everyone. I thought GH was a "community" and moves like this are making the site less and less personal. There is always going to be grey areas/shady people you may deal with, but eliminating auctions all together isnt the answer