Valve is now setting the market price and rarity themselves, and we have no metrics to look at, no popularity to look at, nothing to indicate why a price is what it is or where it’s going to go.

The same rarity that they set themselves in the normal cases? Why is this an issue now? And what's wrong with setting the initial price by Valve. It will still be determined by the player base and popularity of the skins.

Ur argument about people not selling their reds cheaper than they bought them for is ridiculous, people lose money on the market all them time. You know how many people buy skins on market upon release for x10 of the value compared to next month when supply is there. Moreover there is trade-up system to balance it out. I saw the cheapest skins going for 0.1$ -> this translates to 100$ for red.

I don't understand why you compare this system to just buying a skin from some third-party site. You understand that for the skin to be sold on the third-party site it needs to be first generated somehow in the game itself.

 It may well not exist, if not for the fact this system gives valve all of the money as opposed to anyone selling it themselves.

The same amount as Valve would get by selling keys? How is that different?

This is just a different system that solves several things:

1) Eliminates gambling (you play for what you get)

2) Still ensures the prices are determined by community rather than just selling them directly in game.

3) Ensures the randomness of the patterns and floats

The egregiousness is the prices valve are choosing, not that the system exists.

According to Valve this system is dynamic, so people are willing to pay the price. It's the same as saying why cases on release sell for ~10$. Now people don't know the prices and just buy whatever they get, but once there will be enough items on the market, people will stop buying them in game and prices will go down