I do believe in the original days, the items in storage got shoved into the owner's vault and over stuffed it.
When auctions happened before, the buildings on the properties were left in-tact.
Any property not bought during "auction" got a white flag attached to it and made it "for sale"
Novian farmers then ran around looking for white-flagged properties with structures and removed them for the novians.
Then the novian farmers would buy another from a player that wanted said structure on their plot for a few copper, and place the structure on their property, and sell it back to the original owner.
The easy fix for this pillaging is to limit the amount of time a player can purchase a property in the game, or as another suggestion, prevent players from instantly deconning the structures for a week, preventing them from pillaging.
Wiping the world and starting over with plots / lairs would just drive away the remainder of the players. I can see the look on Valtur's face now...
We're sorry, but your Tier 6 Grand Hall and all its contents have been turned into novians and put in your vault. Your guild domination of all "dragon lair communities" have been removed and put up for auction.