They do it because they're trying to skew the price that addons like Auctioneer calculate because it's based on averages. Many people blindly buy or sell at Auctioneer recommended prices, so they put in a number of auctions for commodities at drastically inflated prices to skew the average higher, hoping to sell their non-insane listings at a higher price as a result.

You'll also see people putting up stacks of hunter ammo for the standard price but only 1/10 of a max stack, taking advantage of people that buy without paying too much attention.

Lots of shady behavior on the AH overall.