Why did it shock people? I might have missed the 'panic' over that specific auction, but there is nothing to get shocked about. The only thing that might have been the case, is that people consider the government to be a thieve in regards to seizing all the funds, where they then blatantly sold (auctioned) them for their own benefit. In that regard, it's basically criminals stealing from other criminals. Other than that, these auctions are meaningless for the average Bitcoiner. Only large parties are interested in these auctions as it allows them to buy a large number of coins at a fixed price, which is something they can't achieve when buying the same number of coins on-exchange with their futile orderbooks. That's why these auctions don't get any unjustified hype attention.