This scheme
was modified, but I have not edited this post (will do it soon). Actually, step 2 and 3 was combined in one, so the buyer and seller funds are sent to the MultiSig address at the same time and in the
same transaction.
OK, so that gives you a way of 2 people safely transacting without the need of any escrow. Very nice.
There's still a slight issue:
The buyer locks up twice as much as the seller. If I pose as a seller when I have no intention of selling, I can get you to lock up 2 BTC of your funds while only locking up 1 BTC of mine. As soon as you lock up your 2 BTC I tell you I'm a scammer, and that I need a 50/50 split to release the coins. You have to choose between getting back 1.5 BTC or nothing. Which would you choose?
Maybe some people would sacrifice the 1.5 BTC just so the scammer takes a loss. But I expect most people would agree to the 50/50 split because it's in their own best interest.