I think it is a cool piece, not something I would pay that much for, but really I don't think it is too terribly ridiculous. It is high quality as Sam points out, crafted, and eye-catching. It's definitely designed for a niche market but I can see the appeal for the right people.
should a piece of wood and leather be worth this much
As the desceiption states, it's meant as more to be artistic. I think the design would be a little hard to hold for someone who is flogging, and as someone who doesn't have a scat fetish, i certainly wouldn't want to be holding it to flog someone after it's been used as a prostate massager. And i'm not sure I really like the idea of a wooden prostate massager, no matter how well crafted, over time it would warp, splinter etc from cleaning, and i think it would pose some sanitary issues. I personally think that's kind of a poor combination in design/usage... But there are people this would appeal to, and my personal tastes aside, it is well made from the looks of it, and people will pay good money for something they really like.