It seems like this would be a good gold sink. Also if exorbitant rates were set it might give other factions an actual reason to take over a town to disrupt the tyranny. More people might also join opposing factions. Incentives to take control, to seize power, to join factions, and an overall impact, of factions, on the rest of the population.
I believe this was done so that people not into factions are not affected by those who are in a negative way (increasing prices 300%). Granted there are some non faction cities. I wouldn't mind seeing this reimplimented. It would also help put a stop to any automated scroll creating/selling, reg buying etc. I have a perfect screenshot for this. Let me get on my pc and post it.
A buddy of mine was a few points away from finishing his poisoner early on in the shards history. He had been buying out all the nightshade in Glow. I went ahead and increased the prices 300%.