Steve,
You're confusing sealed bids with a private auction. The tehory behind a private auction is that if the item is particulalry expensive you can avoid being seen to win it, that is to say your name won't be plastered all over newsgroups with "***** just paid £5000 for a length of speaker cable" or suchlike.
As is also becoming common, it stops con artists contacting bidders and telling them they can get the item for half the price.
Finally, and controversially, it's very good for the con artists themselves, they can post a dodgy auction and no-one can contact the high bidder to warn them of the danger they are in.
Simon