Yes $300 is a "fair" market price for the iPhone (first gen) that's in good condition.
I sold one of my iPhone (mint) with the original accessories for $325 3 months ago and I also sold my brother's (mint) just the phone (without headphones/charger/doc) for $275.
Personally I wouldn't pay more than $350 for a mint condition iPhone with accessories.
I've had so many phone calls when I posted my brother's iPhone (advertised for $275) (without any original accessories) from craigslist. I got 50 text messages, 30 emails, and numerous phone calls inquiring about the phone within 2 hours of posting it.
Some people are greedy, I've seen the same ads re-posted on craigslist from people trying to sell their iPhone (first gen) for $450-500 (8GB). Depends if you want to sell fast and how much is making $50-100 extra to you. Some idiots are still trying to sell their iPhone with cracks on the screen for $300. Who would want to pay $300 for a used cracked screen iphone first gen?