Well, since they were not interested in the trademark... and abuse of that material was hurting Foley's business... and someone had to have the trademark to prevent the abuse... sounds like Foley tried to tell the MAME team to get the trademark, the MAME team was not interested, so Foley tried to get it himself to protect his business. Then, once the MAME team was notified, by Foley himself, that Foley was registering the trademark, the MAME team decided it had better get the trademark itself. At this point Foley rescinded his trademark application in deference to the MAME team's application since the MAME team deserves the trademark.
Now, if this is the correct sequence of events, it appears to me that Foley did what he had to do to protect his own business. What he had to do was force the MAME team to protect its own property from abuse by third parties.
In all of this, all of the outrage and hatred, I haven't seen any real evidence that Foley tried to profit himself from the MAME trademark directly. I see a lot of miscommunication, a bit of incompetence on Foley's part as well as Ebay's part, and more misinformed anger than even the Net usually has.
Foley... if I'm right on this, it would probably do you some good here to point out where I'm right and where I'm wrong.