ACEO is the name for a 2.5x3.5 inch piece of artwork which was created with the intent to be sold. So ACEOs are similar to artist trading cards but ACEOs were made and intended to sell for profit.
There are some gorgeous pieces of art selling on eBay, which are ACEOs. One of my favorite artists is LAMBERT. This artist does watercolors. Do a search on eBay for "LAMBERT ACEO watercolor" and you will see some winterscapes come up. My favorites are the ones which are just trees and snow.
Some of them sell for up to $25 each. Lately from what I have seen, most of this artist's ACEOs sell for about $10.
I don't own any of these. If I had the money, I'd buy some of my favorites and frame them and hang them in my home as artwork.
As a matter of fact you can find over 2500 ACEOs on eBay if you search for all ACEOs rather than look for specific mediums (i.e. watercolors).
What is not ethical is getting an ATC from someone free in a trade then selling it. These ACEOs are created by the artist with the intent to sell, which is fine and well for them to do.