This fascinates me too. I see it with the guitar market too. There is a huge number of counterfeit Gibson guitars that come out of China. The majority play and sound like trash, but people buy them. It seems there is a market of people that want to have something that looks branded like the high end original, but don't seem to care that it doesn't perform even as well as a low end American made, or legitimate foreign made alternatives. Looks are nothing to me without performance, so I don't get it either.
I suppose it is too appeal to friends as a collector's piece. If you showed me a Chinese "Gibson" hanging on a wall, I wouldn't know the difference. But then, I assume friends who would appreciate a real Gibson, would also want to hear such a piece being played... at which point the truth would come out. So it really seems like a lose-lose to me.