It does seem odd. The only way I'm seeing to make money off something like part of old mate's driveway would be to get it cheap and sell it to the surrounding owner for a bit of a profit, but when you're bidding against said person and win then you have literally spent more for it then they're willing to pay...

The land being a separate title probably comes down to historical oddities - possibly it was part of an old road reserve that got sold off or something like that.