they might not know what they have, and they might get a MDD or early G5, and price it at $40-50.

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I doubt that, because this statement makes sense to me:

most of the stores I deal with base their mac pricing on ebay, hince the gems I see

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There is fairly good chance that this shop does that. Because I too looked at eBay the day and day after I bought the G3, and most of those on eBay were in the $40 - $50 price range.
Case in point that they don't look closely at the machines: they didn't even know how much RAM the G3 had, or even if it had an OS. In fact, when I took the G3 home and booted it, the OS (10.2.x) was shot. It wouldn't even load to the desktop with icons.

But at least they made a sale. And the owner even told me that this machine was just given to them to be recycled, so any price they sold it for would have meant a profit for him. If no one bought it, it would have been recycled at some point in time.