The mishap had nothing to do with eBay. When they said someone else had bought the bag I thought they meant eBay as I believe on their website, it is supposed to move the item to 'Sold' automatically now - it used to be manual. So what they were saying basically is that their website is flawed, still. There is nothing 'human' about this mistake either, it's purely how their website is NOT programmed to take care of purchases the right way.
Also their policy is 'first pay first get' so I would not trust the whole emailing back and forth thing. While you are emailing them someone else can buy the item online.
on their FAQ page, it says that if the buyer doesn't wait for some automated page after payment (ie, closing window right away, clicking something else such as log out, etc) then the item doesn't get removed from the web page. I believe this has happened many times to other people, and that's probably what the buyer who got the bag did--didn't wait for the page to load and just closed the window or something.
Unfortunately, it takes a LOT of work to make a perfectly functioning web page that will satisfy customers. That is a tricky thing about buying online. You should probably consider that this web site is NOT programmed by a professional, probably simply by a staff member (or else the site would looke more like amazon.com or something like that, probably). Also, let-trade is just a tiny tiny business with an office in Hong Kong. It's not a major chain like (again) amazon.com, where they have tons of staff members and probably lots of programmers to maintain the web site, etc.
Being an engineering student who has taken programming courses to create consumer programs, I can honestly say that it takes a LOT of work to create a program that takes care of purchases AND integrate it onto a web page.
For me, they followed their first come first serve policy.
Perhaps the other person who "bought" the bag that I now own went through the same thing you went through.
I paid a deposit of $100 US the day after it was listed. When I paid the deposit, the item was still on the 'available' page. I didn't get a response until AFTER I found out that the item was gone from the available page, meaning someone did a buy now on the web site. I emailed them, panicking that the bag wasn't mine, however, they still honoured the deposit and said that since I paid the deposit first, the bag was still mine, not the person who purchased the bag off the site.
Anyway, sorry for the long post and sorry that you had a disappointing experience. I think a lot of people here have in fact gone through what you went through and hopefully it won't happen to you again. For me, I know that next time if i'm worried, I'd call them right away (considering what time it is in Hong Kong) so that i can work things out immediately.