That's a question I'll break up into three parts:
Why would you buy from local newspaper ads and garage sales
Note that I have never purchased anything used. All my gear has been purchased new at my LDS. However, if I were to buy used, I would want to touchy-feely before paying for it.
but not from the internet
Because I've done business with the same LDS/owner since August of 1986 and never had a "bad" experience. If I was unhappy with a purchase it didn't matter if it had been three minutes or three months - Ed always treated me right. In most cases the difference between internet and his price is negligible. Once in a while I notice there is between 10% and 20% price diff between his and internet pricing. To me, the extra $10 or $20 bucks (on a $100 item) isn't worth the aggravation of internet buying. I can run down to the LDS at a moments notice and walk out with the item. No muss, no fuss - I can't think of anything I might want to buy off the internet. Most everything scuba is "fit" related, and I can't try stuff on at an internet shop. And no, I refuse to go to a LDS, try their stuff on to find the right size, then walk out and order it from an internet shop. That's just bad karma.
Lastly, and this sounds cheesy as all get out, but I swear it's true: I'm one of those fools who actually goes out of my way to support local businesses. I enjoy having a 20 year relationship with one LDS owner; it's been very rewarding. There are perks to such a relationship.
ebay specifically?
Too many optimistic sellers (and no touchy-feely)....