Shill bidding exists whether you pre approve bidders or not. Atleast with pre approving bidders, you get rid of anyone you dont want bidding on your item. For example, I remove all bidders with a (-1) feedback or worse. I also remove anyone with 2 NPB hits or more on their account. Thats way when I have auctions run, I dont have to worry about bidders who may not pay or are known to have had issues with sellers in the past.
By using such filters, it makes it easier for my bidders to understand whom I wish to sell to. Using the concept, maybe ebay should offer another choice, if bidders whish to filter out sellers who profit from shipping. They wont do that, because its againsst ebay policy to profit from shipping.