Personally, I found FFXI's AH extremely flawed. You could only list a limited number of items, you couldn't specify a selling period, you couldn't list partial stacks, the buyer couldn't see at all what you were selling for, etc. For years people would use bazaar's as an additional method of selling to try get around the various short comings of it's AH system. The same idea would work in FFXIV - if you're a bargain hunter, and I know many in MMO's that are, you'd take the time to go from person to person, stall to stall, looking for the cheapest price. On the other hand, if you're like me you don't really care if you can find something for a few gil less elsewhere, the convenience of an AH outweighs any bargains I may find.
Just wanted to comment on the part about FFXI's AH being flawed. I don't consider the hidden prices an issue because it prevented people from undercutting you by trivial amounts, and you could still see the market value by checking the history. If you've played other MMO's with a standard AH system, you'll notice a lists of items for 1g, 99s99c, 99s98c, etc, requiring you to constantly be monitoring what you have up for sale. Lowest price almost always sells first, even if they are virtually the same. With hidden prices someone wouldn't know if they were undercutting you or not (only undercutting the market value), and so the price drops are usually more significant. The only problem I had with FFXI's AH is the item limit, which you also mentioned. I think people mainly used the bazaars to get around the AH fees and the item limit.
The market wards system as it currently stands is a mess though. I know I won't be paying real money for extra retainers just so I can put one or two items each in the right ward. That's a workaround for their broken system, not a fix - but of course they stand to make more money off it that way. Maybe they should just change the wards into a space for people to leave their characters logged in with bazaars open - tax free - as players found places to do this in FFXI. That way there's a chance you could at least contact the person if you wanted to barter or request an item they might not be selling at the moment. I know if I couldn't find an item on the AH I might wander there hoping to get lucky.
The real issue with an AH in FFXIV is the inventory nightmare they've created with multiple variations of the same item. You've got +1, +2, +3 versions of items and dyed armor - an entire list to browse through ala FFXI would be huge. They'd have to only list the items that were currently being sold, but then you couldn't check the price history for an item you wanted to sell if nobody else had one up already.