(A small note: Apologies about my prolonged dearth of posts. I simply haven't had a mix of time and blog-worthy posts in a while. I'm gearing up for some things and hopefully that changes in the not too distant future.)
dungeon markets. Erik Tenkar today asked about magic shops and I think that the question deserves a bit of exploration.
On a gut-check level, the idea of a magic item store is revolting to me. The thought that you can walk into a store, lay down gold, and buy a magical sword that fits exactly what you need goes against everything I actually like about fantasy gaming. Magic items ought to be rare, treasure, hoarded and not given up lightly. And that really governs the question for me. But the proliferation of items in D&D modules does raise a need for some economy of the things.
As I've mulled it over, I think my objection to magic item shops is really an objection to making procuring magic items something that is simple, safe and reliable. You should not be able to walk into a store, lay down your money, and walk out with a Sword +3, Frost Brand as easily as buying a pair of boots. I'd say at minimum, two of the three elements of safe, simple and reliable should be removed from the equation.
The Troll Market approach I outlined previously is a good way to take away the safe element. Magic items are not necessarily being bought and sold in the safe parts of a well-off town. They are being sold by disreputable humans, or even by monsters straight-up. (This is a good excuse for why so many monsters in modules have magic items that they're not actually using – can't damage the goods.) PCs are not necessarily safe, or require certain difficult conditions to avoid violence. This can also remove the simple element, since the market will not always be there at the PCs' leisure. It could move, and require new challenges to find again. I really like the idea of some of this taking on a sort of "black market" vibe.
Reliability is trivially easy to fix: with magic, there are no guarantees. Sure, the sword shows up as magical when you cast detect magic, but how do you know whether it has the purported properties? It could be cursed, or it could be substantially different. Unless you're willing to blow a charge, how are you certain that the item is a Wand of Fireballs? And it's a very dangerous proposition to test even if you are willing.
Simplicity can be adjusted by making it very difficult to find a specific type of item. Sure, you can grab a Potion of Healing from a high-end alchemist/wizard, and you might be able to track down Arrows +1 if you know where to look, but it should be a lot more of a pain to find a Sword +1, +3 against Dragons. Even if you buy into the magic item economy idea, that doesn't mean that absolutely anything is available easily. And like anything a PC is trying to find, specific items make for terrific adventure seeds.
Another factor to consider in all of this is how magic items react to each other. Having a lot of magic items in one place might not be a completely safe proposition. Too much magic could mean that a magic-item bazaar might create a wild magic area, where spell effects happen entirely at random, and it's dangerous to Detect Magic or Identify, causing havoc with reliability. A store that had every type of magical sword and potion available might run into reasons to roll, say, on the 1e DMG's potion miscibility table, or problems when two intelligent swords decide they don't like each other.
Of course, you can solve all of that by just saying "no" when players want to do buying and selling of magic items. But if you decide to run with it, I think all kinds of interesting problems can be created. Just don't make it simple, safe and reliable.