Meh, it's clear that the seller was trying to pull a fast one. With intentions that obvious, why would anyone want to risk possibly running into him again once he's gotten bolder and trickier? Ebay doesn't want him on their site setting more people up for a bad experience and hurting not only their business reputation but other sellers as well. It's better for everyone if potential buyers are not scared off by public scams like this one because they think all sellers might be trying to trick them. It's bad enough as it is.
All I know is that if I was trying to sell a real xbox, I'd want him gone. That sort of publicity is only going to scare off bidders. An honest person could have gotten that money and everyone would be happy.