1. They have to fork out cash to buy the cheap item. i.e. need capital.
2. They may be buying on a try-try-since-its-cheap mentality, instead of deliberately buying to sell.
3. They take a risk if the item spoils in their care. Some items may not sell. i.e. Stuck.
4. The original seller gets cash - something he wants/needs.
5. Word gets around. You just need one dissatisfied seller/buyer to make a lot of noise, and its game over.
6. There is a 'market rate' for most items, so you can't really make a living out of it. Maybe a once-in-a-while quick buck. If the profit is low, say $20-$50 region, i feel the risk not really worth it. Then again, for some, it is.
7. If you DO make a living out of it, then your profile must be quite high. Income tax may come after you.
Actually, i feel it might be a win-win-win situation for seller-middle-man-buyer, with the middle taking the most risk.