As others have said, some sellers want the insurance Priority offers. $50 insurance with Priority is free. If paid on Media Mail, it's $2.10.
Now in some instances, it still comes out cheaper via MM with insurance, but then again there is the time factor. MM takes quite a bit of time because it's the lowest priorty and many buyers grow impatient and/or frustrated.
Also, eBay and PayPal both charge fees on shipping charged. With Priority, there is a small discount from retail rates to commercial rates which difference is often used for handling/expenses.
That $50 dollar 3 lb book via Media with Insurance would be $5.78 to USPS alone. The seller would be well within their rights to also include $1 - $1.50 as a handling charge. If they added $1.50, it would be $7.28. Now eBay and PP take their cut of just the shipping price (12% to eBay 2.9% to PayPal) - for 1.08. The seller now has $6.20. That gives them 42 cents for packing supplies.
I can use a Padded Flat Rate Envelope and charge $8.25 and cover the expenses and also not have to buy packing materials. That's just a dollar more than I would have to charge for Media Mail.
With an auction, I need to cover the cost of shipping (not just postage) in the shipping price because buyers bid for the item price. Buyers may not like the visual of a $7.28 Media Mail rate.
With a fixed price, I may be able to hide some of those same expenses in the item price so I can show a lower rate shipping price and lead buyers to believe they are getting a bargain (but they are still paying the cost regardless - it just looks different)
More detail than you ever needed, but you can get an idea of what shipping (not postage) actually costs.
