I've long believed that cheap knives have their place, provided you are aware of their limitations and don't ask too much of them. There's something to be said for having a pile of truly disposable cutlery on hand for the nasty home and yard jobs (like scraping tar, or chipping ice free from something in the winter, or what have you) for which you wouldn't want to use a nicer knife. You must use care, of course, since the lock on any cheapo folder could fail, but provided you do that I don't see a problem.
The full-page ad in the SMKW catalog looks to be the same sort of "collection" you can buy from those Home Shopping characters.
Another issue is a question of your priorities. I don't ever need to do much in the way of food preparation, so the block of Ginsu-style cheapies given to my wife and I as a wedding gift is all the kitchen cutlery we've ever needed. They've never needed sharpening because the serrations continue to rip through what little we need to cut, and I don't have any reservations about tossing them in the dishwasher.
As long as people know what they're getting, I'm not bothered by the existence or sale of junk knives.