It's a very good point you make actually poochgroom.
What you will find is that most sellers will limit their selling opportunities if it saves them some level of drama, essentially everyone wants to make money, but most want to do as little as possible to actually earn it!
I see eBayers not wanting to ship all sorts of things, and I'm not talking about heavy items, I'm talking about things that would cost no more than 10 dollars to ship. It's the fact that the person has to actually put it in the box and then drive to the post office is what's stopping them from shipping it.
The crazy thing is that they don't even consider the hassle of having to sit around and wait for the person to pick the item up only to get an email 4 hours after they were supposed to be there informing them that they can't make it today.
Shipping in my opinion is FAR less hassle and day, and you can always sneak in a few extra dollars into the price : )
OK, I've sold some really big stuff online in my time, but I never, ever restrict it to local pick up only unless the item is too big to ship through Aust Post and not worth the value of shipping via courier or some other means.
I always leave the ball in the customers court, happy to ship if you want to make your own transportation arrangements. That gives them the opportunity to bid if they want whatever it is badly enough, and gives me access to a larger market other than those that are only willing to drive to my place for pick up!
The biggest advantage to selling online in the first place is that you are selling to a mass market, restricting any item to pick up only is reducing the size of your market. The smaller your local area is in population, the smaller your market is using that strategy!
I know a guy that had a very rare skateboard, only wanted to list it for local pick up. I couldn't contain my frustration and had a minor dummy spit questioning him as to why on earth he wouldn't list something like that with not just shipping, but with international shipping to give himself the best chance of getting the best possible price, but I couldn't talk him around.
Crazy, he just didn't want to go to the post office. I'm still to work out what on earth is so scary about Post Offices these days, I mean it's almost like they are the new dentist offices. Dentists are fine now, it's the post offices no one want's to go near lol