Nobody can doubt that it sucks to have something you make be undercut after posting it in the AH (I know that happened to me a ton of times), but it's the price one pays for having a dynamic economy. I can't think of any robust economy in history that tried so robustly to avoid any kind of system of price signaling for buyers.
The problems that some had making money (though it was by no means impossible) in the later years of FFXI weren't really caused by the Auction House, the Auction House merely *reflected* the poor lack of currency management by SE. Gil sinks and merchant buying prices needed to be far more dynamic than they actually were and SE took a *lot* of currency off the market. Deflation is a killer in real life, but it's even more of a killer in an MMORPG that has a focus on everyone being a crafter. MMORPG currency is essentially fiat money and SE took little care to appropriately manage it.
In addition, the undercutting "problem" is a two-way street. Yes, you'll start to lose money if you just want to craft something popular over and over again, but the setting of prices by the market has an extremely beneficial effect on sellers as well. Uncertainty is a very important concept in any financial model and without any kind of price signals, crafting items for sale becomes even more of a gamble than the chance that you will be undercut in a few hours. If you have an item that is made of materials that may be worth somewhere between 50K and 100K and you can make a product from those materials that may be worth somewhere between 60K and 120K, you're essentially gambling.
Those worrying that buyers having information will reduce your profit have to recognize that it is a *feature* of a robust economy, not a bug. You're essentially monetizing a cumbersome and poorly conceived bit of programming which has created artificial inefficiencies of time and information. That was *always* bound to be ironed out in the long run, whether it be from SE fixing the problem or buyers simply refusing to go to the market wards - those profits were inevitably going to be temporary.