I'm glad Tom was here to tell us how a AH works! lol
You forgot to touch on something called Supply and Demand. Now lets first talk population, a AH like Stormrage for example has first of all more sellers (competition) and more buys (consumers). That being said supply is up, and demand is up. So things will sell there far cheaper than an AH like Khadgar, where your population is...small (think i've seen more tumble weeds than players in Stormwind lately). That being said you AH variety and options for pets is limited in compared to Khadgar where there are items you see on a Stormrage AH on a daily basis (such as a TCG pet Gusting Gridmoire) which you hardly ever see on Khadgar.
The supply and the demand on Khadgar are low, and since they are low, the prices will be far higher because some items are just even rarer on Khadgar, compared to a server that has a large player base.
But fear not Khadgar, for I am here to save you from the oppression of high prices! I mean as Tom even pointed out, 10k for a Pet Store pet is a decent deal, when i sell them cheaper than 10k...you got a great deal! That being said....about to put a Guardian Cub
up, 8999 gold!
Enjoy citizens of Khadgar!