I have bought a few pick up items and been happy to, to save on postage costs.

My guess is they advertise on ebay for the exposure, there is probably a bigger audience here. Plus they don't have to pay upfront for the ad unless they sell.

Then there is the matter of the size of the item. If it is a big piece of furniture, pick up is easier. They don't expect to sell to anyone interstate, they are hoping for locals to see the ad.