From what I hear over at NA, the guy who is buying these hits the BIN, then negotiates a lower (but still insanely high) price. All in all, the people selling these games are willing to eat the fees at the higher price, because this is clearly driving up the prices on all VGA games (i.e. that Mario is Missing auction).
Really, there are only two ways to stop VGA:
1) start several new grading service to compete. From what I hear, VGA's profit margins are extremely low because they hand-make all the cases. If they had even a little bit of legitimate competition, I don't think they would be able to survive.
2) Prove that their service is a fraud. The best way to do this is to reseal a game (taking pictures of you doing it), sending it into VGA and successfully getting it graded, then post a video of you opening up the graded game. I don't think they would be able to survive that.




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<- can someone please make this as a repro and sell it so me? 




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