Diesels are getting rare and still comand a premium over the gas models, my SDL is worth twice what a 420/560 with 250k on it would sell for. What is happening now is that people are trading up to new cars because money is still cheap. Interest rates are still low and can only go up. Car makers are also offering discounts and rebates. I just saw brand new Nissan Altima's listed for $15,695!
It was the base model but it had power windows and AC, thats not bad at all for a new Nissan, the new Altima is a nice car. So the average joe sees $16k for a used 70k mile E class or $16k for a new under warranty Altima.
It doesn't help that the W211 is out and a new S is coming soon to. I predict the market will get a little worse for sellers before it gets better.