In a lot of the discussions here, there's the perception that purples cost "too much" on the AH because speculators artificially drove up the price of purples, thus hurting the game. At the same time, there doesn't seem to be much discussion about what a "proper" price on purples ought to have been. I personally thought that purples were not "overpriced" on the AH . . . at the same time, for many of my characters, I did not consider purples to be good value for INF.
To start, let's note that purples were available from vendors. You could buy them for 20 Alignment Merits per recipe. That was the developer-set, "appropriate" price. Using 20 AMs as the "proper" price for a purple recipe, if players were actively seeking AMs, they could earn about 2-4 a week per character (1-3 morality missions and a SSA). To get 5 purples (the 6th slot bonus typically wasn't great) it would take you 6 months to a year to acquire a set at that rate. Of course, that's just running 5 tips missions per day and 1 SSA per week, it isn't superhardcore grinding. And you could do that on multiple characters and save up for one set if you wanted. So that was the progression rate.
Considering that you could get a Performance Shifter +End proc for 1 AM or a LOTG +7.5% recharge for 2 AM, you would be better off buying Performance Shifter procs or LOTG +recharges, selling them on the AH, and using the INF to purchase purples on the AH at market rates. In other words, compared to the vendor prices for purples, AH prices were *not* overpriced.
Looking at the issue in more detail, for 100 Alignment Merits you could get a set of 5 purples from a vendor. For the same 100 merits, you could get the Performance Shifter +end proc, 5 LOTG +recharge, the Numina and Miracle uniques, and 8 rare sets (5 slotted) with 5 AMs left over. Of course, if you look at the market prices for the average rare recipe vs the market prices for the most valuable rare recipes (ie LOTG recharge and Performance Shifter procs) you could get far more than 8 rare 5 piece sets. Using the AH, you could likely completely IO-out a character with a relatively high-end, non-purple build for the same number of AMs it would take to acquire one purple set.
Of course, purple sets were "better" than rare sets. For some sets, you could see the difference in great detail. In terms of set bonuses, using Ragnarok over Positron's Blast would get you +1.5% more recovery, + 6% more accuracy, and +5% more recharge. In some builds that focused on +recharge, that could be significant. Additionally, Ragnarok would give you better enhancement values in terms of absolute value and (considering Positron's Blast lacked recharge) in terms of aspects enhanced. Ragnarok's proc had a greater value. And the set bonuses were not subject to exemplaring level rules, you'd always have those bonuses. If there was no tradeoff, if you could simply pick one set, you'd typically pick Ragnarok over Positron's Blast. But, as noted above, the tradeoff is that if you were starting from zero, you would get *way* more bang for your buck putting your resources into non-purple IOs.
If you exemplared a lot, purples were *fantastic*. The enhancement values were well beyond ED values at level 50, but when you exempted down your enhancement values were degraded, so having more than the standard value helped. If you had procs in low-damage powers (ie the ones you have access to at lower levels), purple level procs could really shine. And the set bonuses were great when exemplared. Having +50% recharge, +20% recovery, and +75% accuracy at level 1 was amazing. But unless you exemplared a lot, that really wouldn't play into your valuations for purples.
To me, comparing a well-thought out level 50 rare/uncommon build with no purples to a similar build with purples, the purpled-out build would be slightly more effective but not necessarily worth the cost. You'd have something like 8% more recovery, 30% more accuracy, and 25% more recharge. You'd have slightly better enhancement values on the purpled out powers, and your procs might be better. You'd be better when exemplared. And for those gains, you could have had 4 other characters with expensive non-purple builds. There were very few (if any) encounters in COX where a purpled build would have dramatically outperformed a high-end, non purpled build. Purples were for the most part a luxury for players who really, really liked a particular character. They weren't needed for effective builds or necessary to participate in high-end content.
The flip side is that, if you got a lucky purple drop, the prices of purples on the AH meant that you essentially never had to worry about INF again. Do I think purples were "overpriced"? In many cases, yes. But not because speculators pumped the price too high, but because I thought buyers could have made better choices as to how they spent their INF. Clearly the AH prices were "low" as compared to the prices set by the developers at the vendors. Speculators could set the price for something that no one really "needed" as high as they liked, but unless someone felt like purchasing it at that price, they'd have no luck.
I did not see the high price of purples on the AH as a problem, since no one was forced to buy purples and the cost of purples from vendors was even higher than on the AH. Ultimately they were status symbols for players who already had more influence than they knew what to do with, and the effect on gameplay was minimal. If the "ultimate" gear in COT is similarly expensive, but similarly underpowered as compared to price, I don't see that as a problem.