Jumps in item prices the past few years have been the result of real inflation, not artificial inflation or people being greedy. Booty Grab was a particularly bad offender. The game gave out so much gold for so little work that the gold became worth less than it was before, and prices skyrocketed. Think of it like this: say Gaia decided that, tomorrow, they would give every user ten million gold. Suddenly everyone can afford more items and they all get bought up. To return the market to a balance, prices of the items will go up.
And a lot of people can tell you, a lot of prices have been evening out or going down lately. There's a GCD thread called "I can't believe that item is that inexpensive!", where users post links to items that have either drastically dropped in price, or are a great deal for what they are. (like a low cost on an item with nice hair, or a ton of poses) I attribute much of the deflation to the increase in cash items. I remember when I first joined, MCs were a much bigger deal. Took me several days, maybe a few weeks, I can't remember, to quest for Gwee the Dragon, my first MC. A new user now could easily raise the 30k I paid for the item and buy something else, maybe something even higher quality.
There are certain kinds of items that you can mostly only get with cash items. Pets, weapons, backgrounds, and others. Back when I was new, MCs were in much higher demand. It seemed like every other person was questing for the Ancient Katana. But now, that's not the case. Reason being, there are so many more weapons available that are just as good. The Ancient Katana has more competition. When the Ancient Katana is one of the only weapon items available, more people will want it because they don't have other options. But when you put out a few hundred other weapons, in more variety, many people will stop eyeing that katana and go after one of the new ones. When I was new, there were a few pricey MCs I wanted even though I had no chance of getting them at the time. Kiki and Coco, and the Katana. But now, I don't care much about any of those items. There are more and cheaper weapon options, and the same goes for cats, well, animal companion items in general.
But, really... Why is it such a big deal to you? "Do some good" with virtual gold? Yes, it's nice when people give gold and items to each other, I try to do it once in a while if I see someone questing for something and they aren't too far off, or I can easily afford the item, and I definitely enjoy getting gifts myself. But in the end, they're just pixels we use to make our virtual dolls look nice. Even if a user decides to hoard all of his gold and constantly plays the MP to get even more, he's not doing any harm. It sucks and it's not fair when people hoard items to artificially jack up the price, but people can still buy other items.