Unless you read it in the TOS you are mistaken.

I'm not talking about circling the AH like a vulture buying out every arcane dust and relisting them at higher prices indefinitely.

I'm talking about buying out 5 somewhat under-priced Greater Eternal Essences and then re-listing 50 at a 150% markup to market (and making a killing).

I'm confused as to how this is any different than buying out one under-priced blue item and re-listing it at above market. In that world, it would be an offense to sell any item for more than you paid for it. Sorry, but I'm not a big fan of not being able to make profits.

Perhaps a centrally planned AH would be better? Blizzard could dictate what prices we receive and pay for items? From each according to his ability, to each according to his need? Maybe we could just replace the AH with a giant NPC with <USSR VENDOR> over his head?

You'll forgive my attempt at humor, but profiting from other peoples' pricing mistakes isn't a bad thing. It's a necessary part of having a fluid and liquid marketplace.

I don't really want to get into a back and forth "what if" and "no u" session and shit up a good thread but if we're going to use hyperboles then I'll offer a counter example. Say one of those guys with 100k gold decides to buy up an entire AH worth of stuff and re-list at 50% markup. I can almost guarantee you they'd be banned for purposefully, negatively effecting the entire economy of a server. Now, obviously someone buying up 5 GEE's and reposting at a higher price isn't going to infuriate the masses, and everyone does it once in awhile, or more than once in awhile. What I'm saying is, if you find yourself monopolizing an entire market, as you've described, then most likely you're going to run into the "Blizzard SEC".

Like I said, I've heard of someone being banned for running an AH monopoly, I also said that it wasn't me, and that person could have been lying (although it would be kind of odd for them to make up something like this), so I can't be 100% sure. I'm just saying, be careful to the extent you take your buying and reselling because, from my experience, the potential for bad things to happen to you is there.

Also monopolies, unless you're playing on a very small server, rarely last long. It's not like all of a sudden a single person is going to control everything on the AH all the time. You might see one person controlling arcane dusts, and maybe also netherblooms, and only for a limited amount of time. Farmers will see the prices are high and start focusing on that and will break the monopoly. It's just a way to make money from the "holes" in supply, but you also take risks, never know when someone is going to empty his mule on the AH undercutting all your nice auctions, and freezing your benefits for 1+week.

Now, I'm not an AH player, I just don't have the patience to sit at the AH buying stuff, running auctioneer and finding out what to sell. I do buy a few tailor special clothes on sunday because the prices drop during weekends, and resell them on wednesday/thursday when they're higher, but I don't want to be spending more time than that. I think if you're spending time analyzing the market and browsing thru the AH, you should earn money, it's just the same as farming mobs.

I've done it myself, and I've been banned. Back before BC, if you bought Runecloth on Khadgar, you bought it from me. The account I'd been buying and selling on got a perma-ban, and the account storing the money got at 72 hour ban. Two weeks of calling Blizzard and such got me nowhere, and I never did get the account back. I wasn't doing anything I personally would have considered 'bad' either, just buying everyone's runecloth that wasn't mine, and selling them at my current price. I'd done it on both Alliance and Horde, and I was fine for about a month.
True, I was one of those guys with a ton of gold, and I was absolutely controlling the market, making a monopoly. It was very profitable, but I won't go there again, I don't want to lose my account... again. I even got this nice email from Blizzard for the 'willful explotation of an ecomony.'

Aye, I've been thinking that the increased tree farming in Skettis is probably due initially to this forum, before it caught on elsewhere. They mostly went untouched until very recently, on AD at least.

I've been farming them for a while now and while I've noticed a huge decline in Ancient Lichen prices, the only other thing that I've seen at a low price is Mana Thistle. This has always been fairly low price on my server due to slow progression on my faction. (1 guild in BT and they're farming Illidan, the rest are stuck on KT/Vashj)

The demand for dreaming glory and felweed hasn't decreased either... they have all been selling like hotcakes, but the price is about 15g cheaper (mostly the dreaming glory) per stack than it was 2 weeks ago. I'm hoping this tend will subside... I need to get my epic mount!

Perhaps I should save up some coin and start my "own market" like so many others have been suggesting in this thread.

I find pure leverage both boring, and inherently somewhat risky - arbritage relies on the market being inefficient, and while this is usually true for a wow AH, it isnt always. Speculation can and will fail you on a semi regular basis, and will tend to do so more and more often the more people engage in it.
My personal preference is to "add value" to AH transactions I make reasonably large amounts of money off the ah by finding something, anything which matches two criteria:
1:it is easier for me to come by than it is for the vast bulk of the server.
2: It is in demand.
Then I get it, and auction it. This general tactic has never failed me yet, and unless I start to suck at wow I dont see how it ever can fail me.
Examples:
I paid for large amounts of my pre-tbc raiding by soloing BRD bosses for large briliant shards. and the ace of elementals,
My epic flightform was financed by being the only 375 engineer with a copious supply of primal nether when the khorium destroyer came out,
Currently enjoying a windfall from having consortium revered and being an enginner (this one cant last long..)
And finally, being able to do the shartul event is a fair chunk of cash every 5 days.

The people who are selling epic gems off the BT trash are essentially utilising an extreme example of this mechanic - Very few people on any given server are in a position to try it, fewer can pull it off, even fewer think of it, and the number of buyers for epic gems is very high.

Ancient lichen price sag may be caused by the new dungeon dailies - I have noticed a big increase in traffic through the 5 mans, which means more people hitting the lichen nodes inside instances themselves.

I farm the chest in Underbog. I can't do it on heroic yet, but I can do it on normal without problems. The stealth runs are quick, 5g+ per chest, stuff to disenchant, and occasionally a rare gem.