It is extremely bad for businesses. These guys typically sell products at a much lower price than a normal business because they don't have overheads. This causes conflicts with actual businesses.
Basement sellers don't usually have good warranties and typically don't know what they are doing. They start selling stuff from their basement to make money, not necessarily because they know what they are doing.
For a consumer, basement businesses are a great way to go for products because of low costs. The problem for consumers is when stuff starts going wrong, it is hard to get it fixed right, they typically don't know what they are doing, and many actual business end up making the repairs (and not making any money for it).
From a business side, these are the people that kill businesses and low the values of a brand. Actual businesses have profits and overhead into their prices, while basement businesses don't have overheads. So, they cannot compete with the pricing. As stated before, many of them don't know anything or much about the products and cannot warranty items. In addition to this, many aren't actual dealers and are actually selling products illegally. The problem is finding the supplier who is selling to the basement guy. When a manufacture typically finds the supplier, they stop selling to that company. There are a bunch of other reasons but from a business side, these guys hurt everyone eventually.