used bikes?

[TxDoc]

Is this just LBS salesman talk?

I'd say yes, it is the talk of someone that wants you to buy a new bike from him instead of a used one from ebay or wherever. People sell used bikes mostly because they have purchased a better one.
You can buy a used bike and make a very good deal. It is like buying a used car: you buy "more car" for the money. With 100k you can buy a brand new cadillac roadster - or a used Ferrari... big difference!
The same happens with bikes. Let's say you want to spend 1k. If you look at new bikes the choice is very limited, while in used bikes the same amount of coin will buy you a better frame and better components.
Now, of course you have to be careful. If the seller is serious (most ebayers are) he/she will have no problem providing you with the serial #, production year, list of components - so that you can do your homework before you buy, so to speak. And most sellers on ebay also offer a return policy - and you have extra protection from ebay and paypal.

Has anyone found and purchased a used road bike happily (or unhappily?).

Actually yes, one of my current bikes is a happy ebay used bike experience.

One recommendation: get a preliminary fitting and test-ride as many bikes as you can. That will give you an idea of what models, sizes and materials suit you best. At that point, you can look into the used market when you already know what kind of bike (size, material, geometry, components) you want to buy.
Happy hunting!