Some people think that when you create a spellcaster character at a particular
level, it's unfair to let the spellcaster with an item creation feat count
the cost to create instead of the market price toward her total value of
gear. The argument is that compared to a spellcaster without the item creation
feat, the crafting spellcaster can have items worth up to twice the value
of the craftless spellcaster.
Here's why it's perfectly fair to let the crafting spellcaster get this discount.
Think of it this way:
DM tells two players that they can build a character with 11,000 XP.
Player 1, Bob, decides to make a human cleric named Brokk. 11,000 XP would put him at 5th level. He chooses Alertness, Combat Casting, and Improved Initiative as his feats. A clr5 PC should have 9,000 gp worth of gear ... Bob then buys 9,000 gp worth of gear. He's done.
Player 2, Jane, decides to make a human cleric named Joreka. 11,000 XP would put her at 5th level. She chooses Alertness, Brew Potion, and Improved Initiative as her feats. A clr5 PC should have 9,000 gp worth of gear ... she then buys 8,000 gp worth of gear, then "spends" her remaining 1,000 gp making potions (worth a total of 2,000 gp market price), which also cost her 80 XP (1/25th of the 2,000 gp market price). Net result: A clr5 with 10,000 gp worth of gear.
While it initially might seem unfair, Jareka paid for
that extra gear, both in terms of XP and the feat she spent to be able to
do it. Joreka may have more gear than Brokk, but because Brokk has Combat
Casting and Joreka doesn't, Brokk is better at casting spells in the midst
of combat than Joreka is. Net effect: he's able to successfully cast more
spells than she, which balances out her "spells" in the form of potions. He's also going to gain a new level slightly earlier than she will because her XP total is less.
So when building a character above level 1, you take into account the cost the character
spent on the items, not their market value. Just be sure to pay the XP cost,
too (which is another reason* why it's usually better for a DM to give people
a starting XP value and let them work from there rather than giving a specific
* The primary reason it's good to do so is if characters with ECL adjustments, such as drow, are options for the players.