Here’s something from that ebay discussion board that I hadn’t thought of:
There is one serious problem that needs to be solved fast:
The case where the high-bidder and the next underbidder have the SAME bid. The high bidder is high because he/she bid sooner. But anyone who sees that the two high bids are the SAME, now knows what the high bidder's highest bid is, because it's not one increment above the underbidder. This is very BAD for sellers, and for eBay too, since both lose money.