Yeah that is absolutely horrible. There is a reason why snake drafts are the most popular. They are easier and one of the fairer versions of drafting. Picking last is hardly ever better even with the turn. There has been research done on how the higher you draft the better (i have and do play a lot of fantasy sports). This version would give the top picks such a strong advantage it would pretty much be ridiculous. Having higher picks later in the draft is never better since the relative strength of the cards goes down significantly.
Honestly the best way to go is to have an auction with a set amount of "money". Getting everyone together to do this may be a bit difficult but making a separate chat (typewithme anyone?) and setting a set time where representatives of each team can all get together may be feasible.
Like you, MrBlonde, I am a veteran of many, many fantasy sports seasons and am familiar with both the Auction and Draft formats in pretty much all permutations thereof. That being said, I highly doubt that a live auction is feasible given the constraints of so many different time zones and adjusting strategies on the fly. Just like in this format teams have to adjust strategies and picks as they go, the same thing happens with an auction. The big difference is that with a draft, teams have the ability to converse and reach a consensus of sorts when it comes to picks, whereas with an auction it is much more on the fly.
The only way I could see an auction being feasible would be if it was done War-style, with the captains being the ones placing the bids and then every day any card that hadn't been bid on for X number of hours would be 'sold' to said team. This way, there could still be some discussion regarding which cards to bid on within a team, but it would be much more 'fair'. Obviously, this changes the event a lot, though, so it may not be the way to go.