If he thinks his item costs 33 gold, shouldn't I be getting it off of him though? If I bring my price down to 222-33=189?
No. See somewhere else. We don't do used items.
This is his "mental value". Basically he thinks "yeah, this thing is worth 200 gold. It gives +4. So it's like 50 gold for every +1. But I already have something that gives me +2 so really I only get another +2, so it's like 100 gold for every +1, wow, that's expensive!"
Nobody said they're entirely rational, these heroes. :-)