I think the days of bidding frenzies are gone...
There are still sellers who think that a low starting price is the best way to list. eBay's own advice pushes that idea. It's a false idea.
When it comes to sellers who mislead, no one likes the flavour of "I've been lied to". In terms of cancelling an item, though, as has been pointed out in this thread there are only three pre-set reasons for cancelling - and in many cases it means the seller has no option for to choose a reason that doesn't fit the scenario at all. If the OP's seller found they'd been burgled and one of the stolen items was the listed item, I suppose the closest reason for cancelling would be "The item is damaged or out of stock", but - again, as has been pointed out - selecting that reason for cancelling will result in the seller being metaphorically spanked by eBay.
That's not to avoid the fact that sometimes a seller may choose not to proceed with the sale, and will cancel the transaction with whatever reason they choose. There's no doubt that this can infuriate a buyer, particularly if it was a very good deal, or a rare item, or was just the right thing for whatever reason. The buyer could take the seller to court, but that may involve considerable costs and difficulties. It is almost certainly not worth it unless the purchase was quite high-value - e.g., the Smyth vs Thomas case quoted earlier.
Abiding by the same terms, you can imagine how chaotic it would be if every seller who has had a buyer try to cancel post-sale, or refuse to pay post-sale, would take such non-paying bidders to court to enforce the contract. It is just not practical... and in that spirit, many sellers will cancel the sale with the reason "Buyer requested cancellation" - even though eBay's own UA points out that a contract has been formed. For NPBs, I know that some sellers have become highly enraged with them, and would like to do more to stop buyers from failing to pay than simply issuing them with an invisible NPB strike and hoping that it will limit the buyer's ability to purchase on eBay for 12 months.
At any rate, enforcing a sale - even when it is a legally binding contract, and you'd really love that item at that low price - is very probably more trouble than it's worth, and may not result in the outcome that the buyer wants, anyway. In the same vein, as I've said, sellers by and large will decide it's not worth trying to enforce a sale when there's someone saying "I want to cancel", or refusing to pay. The pragmatic approach of letting it go may be best, especially if you calculate time, effort and cost to take it further.
