If the market moves down after you bought, you are stuck holding the bag. You can either a) sell for a loss, or b) keep your item, and be unable to make further trades until the price (maybe?) recovers. Remember that OP put his entire stack into this, so he can't run the spread while his item isn't selling.

You can have unrealized losses since it's possible that the value of your items is less than the value of the goods you paid to receive them. To repeat this strategy the next day, you need to convert your items back into gold and realize the loss (or just introduce more gold via other means).

lots of video games charge a fee of in game currency for a transaction through an auction house or other system. It acts like a sink against inflation in the video game economy

RuneScape did not, and did have massive inflation, to the point that some players would have trouble keeping their wealth in gold coins due to hitting the signed integer limit.