Market, yes. Buyers and sellers both with wildly unrealistic expectations? A BIG yes.
Yep..I've gotten some of that pushback on winches that I've sold - "I'll give you $100...Why would I give you $500 for that old 9K Warn when I can go buy a brand new 12K at Harbor Freight for $200 less than that?!?!?
On the other side, I've seen it from sellers too...asking $1200 for a Warn M12000 that looks like it's been sitting outside behind the shed for a decade in a bucket full of water, missing the cable, remote, solenoid pack and all wiring, that the seller has no way of proving it works, because Warn's MSRP on it now is almost twice that (even though everyone sells it for far less) because - "hell, you can get all those missing parts for a few hundred bucks, and still come out cheaper than a new one. Of course I'll guarantee that it works!"
Or the people trying to pass off a Belleview or 5687 as a 8274, as they were very similar in appearance to the 8274, and were the predecessors to the 8274, but with two important distinctions - they had a cable actuated brake that typically only was functional from inside the cab and did not have a power out function, only power in. Not a huge deal if you're just pulling yourself out from snow or mud, but can be a real pain in the back side on technical rocky climbs when you need to inch back down just a little bit to get on a better line.
But yes, the cheap Chinese stuff has definitely affected the market and prices on used stuff, but hasn't killed it either. I've got a few of the Chinese winches, and they're fine as trailer winches, or on smaller, lighter weight vehicles. The HF on my Samurai works OK, but I wouldn't want to run one on a full size. One of the big things I've noticed on many of the cheap Chinese winches are brakes that could be described as lackluster at best. Even on the Samurai, the brake on the HF 12K won't hold it. It keeps the Sammy from freewheeling down the hill, but really is more of a "slow down" device than a holding device. Whereas I feel like I could hang the K5 completely off the Warn cable and brake and not worry about it going anywhere.