...the only thing I see an auto-bid feature doing is eliminating the chance that two (or more) users end up in a bidding war. Ultimately that means lower selling prices.
The counter side is autobid allows everyone an opportunity to bid to their maximum on any auction, preventing the situation you mentioned: "Sometimes I win and get a great value due to low number of online users."
In any case, I don't think the effect on the market is that big. If there was going to be a significant negative impact, there would likely be evidence visible publicly on the games that have implemented autobid.
...stop claiming it's about user friendliness (...) I've set alarms and woke up at 3am numerous times. Sometimes I win and get a great value due to low number of online users, other times I've went back to bed irritated because the player went way over my max.
Bidding at times when you're not available or sleeping is exactly what I meant when I said it's about being user friendly. Autobid makes the BuzzerBeater easier on the user. You get online, you place your maximum bid and you're done. You don't need to log in at 3am, during school, during work or during family time. That brings it in line with the rest of BuzzerBeater, because there is no other task in BuzzerBeater that requires you to be online at a certain times in persuit of success.
Perhaps "user friendly" is not the right phrase, but making the game easier on the user is what autobid is about.