Yes, for a few reasons -- one practical, one perceptual, and one personal. But as you say, the sheath has to be "decent and functional" as a baseline.
The practical reason is that it provides the new owner with instant housing for the knife both during and on the way home from the show (assuming the knife is sold at a show). That same housing for the knife should also provide carry for it during hunting, camping, etc trips (i.e. in the knife's intended arena of operation).
The perceptual reason is the "value added" convenience that you are providing with a complete package solution. Including the sheath with a knife, you are selling the buyer a turn-key "ready to roll" commodity. Your knife is thus not a starting point for a project that will require more time
(sending/giving knife to a sheathmaker long enough to have new pants made for it) and more money
(paying the sheathmaker enough to give your knife back
) on the part of your initial buyer. The convenience that your sheath is providing has a value in the selling equation. Also, your price for a sheath as part of a package is very likely to be less than the price charged by a single-function sheathmaker. Your bread & butter profit comes from the knife itself (but don't short your profit margin on the sheath manufacture due to that fact), whereas the sheathmaker has to clear more profit since that is his b&b profit item.
The personal reason is the satisfaction of learning a new skill and mastering the materials & techniques that it requires. Whether you make leather or kydex or cordura sheaths, some of those skills can translate to other activities or areas of your life. By learning to make sheaths you have expanded your experience base and have a new frame of reference for further learning, even in unrelated subjects.
All that said, there are reasons why many knifemakers don't make sheaths. The skill sets for making knives and sheaths are different.... some knifemakers just don't like what the sheathmaking entails or aren't drawn to learn (or aren't blessed naturally with) the perequisite skillset. Thus for them it is worthwhile to either subcontract it out to the pro's or sell pantless knives with the understanding on the buyer's part that they will have to track down their own sheath for the knife.
Sheath making (like most other things in life) is a matter of practice. The more sheaths you make, the better and quicker you get at making them. The guys who do it for a living will likely always be able to make a better sheath and make it quicker, but will also be charging a premium price for doing so since their expertise with their material is higher.