However...by listing them so closely together, and even though it allows potential buys to become more aware of the numbers, he is lowering to value by flooding the market.

Potentially, he might only have 5 of each. The end result might be as if he had 500 of each.

The values might go lower then deserved, and as a result, the owners of these chips (prior to the new ones coming out) see large decreases in their chip values. As you said in other words, such is the nature of our hobby, as unfortunate as it may be.