People, you need to understand basic economics.
Say ~200000 people are willing to buy a Pi for $35 + shipping.
Say ~1000 people are willing to buy a Pi for $200 + shipping.
Say there are 10,000 people with their hands on Pi's, and 10% of them (1000 people) are willing to sell theirs online.
Then they will be sold on secondary markets like eBay or Amazon Marketplace or Craigslist or whatever, and buyers will keep on bidding the price up and forcing other buyers with lower cutoff prices out, until all but 1000 buyers are priced out of the market. With these example numbers, the price point where that happens is $200.
There's nothing illegal or immoral about that; it's capitalism's way of allocating limited resources to those who can make the most economically productive use of them.
Selling these on auction sites was inevitable once they were released. Closing prices substantially above the nominal $35 price was inevitable given the enormous imbalance between supply and demand at that price point.
I personally think the past delays, and the current lack of information about batch sizes / ship times of later production runs, have made the problem worse. It's difficult for buyers to believe anything the Foundation / distributors say about delivery dates at this point. (And the fact that Newark's order status page is still telling US buyers "August" doesn't help matters.) So while I'm sure eBay closing prices will fall to near the $35 nominal price when the distributors' backlog is cleared, many buyers are willing to pay not to have to deal with the time lag and uncertainty around when that will happen.
As for the giving of the Pi's as gifts to students at this point in time -- I don't really understand the rationale behind that -- I thought the first batch was for developers, and the plan was to give the schoolkids a product with a more mature software ecosystem and a case in the fall.
And I can certainly understand the seller's point of view; even though I would have loved to have one of these as a kid, if I'd been given one I would have certainly flipped it on eBay at these prices and bought a new one for $35 six months later. GBP 175 is a lot of money, especially to a kid.
Heck, I'm not a kid anymore but I still might sell mine if they're still selling for this much when mine arrives!