I think the seller did the right thing in this case but I disagree that the auction page was OK...
If something is described only as a 'calculator' I would expect it to work like a calculator - not a collection of plastic and metal. An auction listing is part of a legal contract between the buyer and seller.
However I realise due to greed / stupidity / laziness / ignorance that people put up auctions without describing the item as it should be.
I think ebay should put some check boxes that MUST be completed when submitting an auction, the auction page would then have a section with the following info:
1) Picture is of the actual item for sale.
2) Seller has full knowledge of the item (i.e. seller can't hide behind the excuse of 'I was selling it for a friend / relative so did not realise it wasn't working...')
3) "The following works..." (followed by a text list of the things that do operate) or "The item is untested".
This does NOT stop someone lying BUT it would lead to less misleading sales and give the buyer a stronger legal position as the seller could be shown to have lied.
However it seems Ebay is similar to many other listed companies only looks after it's short term future. Sellers pay Ebay and the higher prices misleading items sometimes fetch add to Ebay's profits - so why should they care?