If people post with auctioneer, it will post at what it considers " reasonable" and not just undercut by whatever like TSM, QA, etc do.
I doubt he's using auctioneer with the market price posting, because that would post gems at the market price when there's cheaper ones. He doesn't do that and still undercuts ones under the market price. So he's either doing something highly customized or setting the price manually.
Try to buy out his stock at about hat hes AH them for, it will save you aggravation. But don't be surprised if you have to buy em off the AH instead. A Lot of people play the AH to piss people off more then to make money, and to aggravate someone who's deep in the market can be an epic win.
If I were to buy his stock, I'd probably have 10-15 stacks of each gem within 24 hours. Multiply that by each day. He can cut and post them faster than they sell (as can I since I have a pretty regular supplier of Ore), so he'd be making all the money and I could never resell all the ones I bought fast enough.
Also, Ore is one of the least profitable markets on my server since there's always an insane amount of supply 600-700 stacks of Elementium at any given time), so trying to bottleneck that market would be a massive risk.