That's a pretty rotten attitude to have. I guess if somebody fixes up an old car and turns it into a hotrod you expect them to take a massive loss when they sell it after all the hard work and money they put into it? If the guy isn't lieing, and he's had the fish for a while, he's fed it a lot of $ in food, on top of the value of the fish.
The guy i've been buying live rock from is selling his rock at a profit, but he's selling it at less than half the price of the LFS, and he also frags coral and sells the frags to help pay for salt and other maintenance supplies. All his prices are fair and he leans towards the generous side on every transaction like if i only have 30 dollars, and the bucket of rocks weighs out at 12lbs he'll shrug it off and take my money. The LFS would charge you down to the tenth of a pound. I highly doubt there are a ton of hobbyist reefers out there profiteering and taking advantage of anybody. Most are probably just trying to offset their spending a bit.
What's wrong with turning a hobby into a business anyway? How do you think a lot of shops get started? For fish only stores, a lot of people start out as hobbyists, start breeding fish and selling stuff and next thing you know it becomes a business. People do the same thing with all sorts of hobbies like photography.
You sound like somebody that works in a job they hate and think that nobody should ever make money off anything they enjoy.
Not a rotten attitude to have when people run the hobby like a business and charge as much or more than LFS prices. Turning a hobby into a business, sure go right ahead but some people actually go through the proper channels and obtain a license to deal in livestock.