It'll be pretty effective at that. They couldn't undercut the RMAH prices by more then 20 percent, otherwise they might as well sell there. At 20 percent, I think people are just going to leave their money with blizzard instead of risking a third party.
Be interesting to see if some of the people who ran those move their business onto the RMAH though. I assume the 10 item limit is to make it more annoying for them lol.