I understand I made a wrong pre-judgement here of purchasing without paying attention to what I was buying, though do you see it fair or unfair that people can set such ridiculous rates?
I don't understand how you "miscalculated", everything is already laid out for you before you make the trade. It shows how much fiat you're paying, how much btc you're getting, and the exact rate that you're paying at. The list of buyers to choose from is automatically sorted by the rate. How did you overlook this?
The premium you're paying on LBC is more than fair. First of all, sellers on there often gets their bank accounts closed (most likely banned) for dealing in btc. There are also plenty of scams on there that results in significant losses. All these risks are factored into the price. So that's the seller's point of view.
Now lets look at it from the buyer's side. As a buyer, you're able to get your btc within minutes. Try wiring money into an exchange and see how long it takes from the time you send the wire, to the time you get btc in your personal wallet.
As a buyer, in general you also get btc without leaving a paper trail, while the seller will have to deal with possibly proving to the IRS where all the fiat came from. You get your privacy during the transaction. The exception is if both buyer and seller meet face to face for the transaction.
Lastly, wiring money into an exchange is not free. It costs ~$50 for an international wire into the exchange, and I believe ~$150 to wire money out. It's only cost-effective if you wire large amounts of money into an exchange. On LBC, some people like the luxury of doing weekly small purchases of ~$80 worth of btc purchases, which is not possible with an exchange due to wire fees eating up the actual available funds to purchase the btc.