hotels.com? uber.com? stamps.com? There's lots of really big businesses built around single word domains. Not every single one of them of course, but definitely enough for good domains to be immensely valuable.
They sold for quite a bit more than $1M, in fact. I would argue that the actual sales are realistic (in the sense that they reflect the actual price that people are willing to pay for them, i.e. their actual value), and it's merely your expectations that are unrealistic. You are significantly underestimating how valuable a good one-word keyword is in a single globally unified namespace used by billions of people daily. For companies worth many billions of dollars (most of the below), a few million on a killer domain name is nothing.
Here are some notable expensive domain name sales:
Uber.com 2% of the company's equity in 2010 (!!)
Sex.com $13M
Hotels.com $11M
Tesla.com $11M
Porn.com $9.5M
Fb.com $8.5M
An asking offer without a bid is just that - an offer. I can ask $1M for that red apple sitting on my desk. It's completely irrelevant.
PS. This behavior is quite prominent in real estate prices, they're so slow to fall down. For example the US real estate market bottomed only in 2011. You have to be very patient if you want to buy the dip in such "I will only sell for the right price!!" markets.
Real estate isn't a great example because the carrying costs of unsold property in the form of upkeep, property taxes, mortgage, insurance, etc., are non-trivial. In general it's not remotely reasonable to hold onto property for 20 years without selling it. By contrast, the holding cost on a domain name is effectively zero, so there's much less pressure to get rid of one quickly. Plus, seeing as how the prices have only continued climbing over time, people who held out earlier and then got a good deal more recently don't regret it.
If I had a good portfolio of potential $1M+ domain names I too would hold onto them and wait for the right buyer to come along. I'm in no desperate need of money right now.
You'd be surprised. Not going to name anyone in particular but I know of multiple major one word domains that have been bought for that order of magnitude (some more, some less). For certain companies, that's chump change compared to the additional traffic a good domain name will bring their business.
