There were things the seller could have done to act in a fair way. Given that the private offer made would never have exceeded the Buy It Now (or else that option would have been used instead), the B I N price could have been lowered and the sale made "on" Ebay.
Or they could have asked the offering party to make a bid and then ended the auction early by offering to sell to the highest bidder. Both of these methods are quite acceptable to Ebay.
Ebay won't of course care a dot about the "fairness" of other interested parties and how they may lose out, but they do take their own loss of revenue very seriously.
