Didn't know you could cancel bids. I thought you just had to end the auction. I agree with ATLNoob, that may solve the problem, though I wonder whether they'll figure out a way to close that loophole.
EDIT: Just read Brian's post. They obviously picked up the loophole. OK, Brian, I get your rationale. But it seems to me this is one of those "The beatings will continue until morale improves" kind of deals. The reason people are going outside the system is because the fee structure and seller protections suck. Increasing fees and decreasing seller protections isn't going to have the intended effect. It's just like the music industry jacking prices and cracking down on pirates.
Is canceling bids available to all Ebay sellers? I'm too cheap to pay for anything other than the default free account.