There are a few knives in the $10 range that aren't knockoffs and aren't crap -- Opinel and the various Mora manufacturers come to mind. I doubt the dealers get as much markup on them as on knockoff junk, but at least they know they aren't responsible for their customers losing fingers.
Some Spyderco models are very affordably priced, but there's just no way to manufacture anything that resembles a Spyderco to sell for $10. If you use even half-decent materials and make a lockback or liner lock with enough precision to be safe, it's going to have to retail for more than that -- no matter economies of scale, no matter how much you invest in machinery, you just can't do it that cheap.
Maybe Spyderco could make a slipjoint in that price range, if they wanted to. Even if they did, would the ignorant buy it? Or would they say, "Why should I waste $10 on that when I can get this other one for only $4 and it has a locking blade too?"
I think if I were dealing at shows I would have some low-buck but usable knives at one end of the table and the price and quality would gradually go up along the table until you get to the really good and expensive stuff -- and I would try to set it up so the customers would start at the cheap end of the table. A friend of mine set up his used computer store like that. People who didn't have a computer would walk by on the street and see he had used computers for sale starting at only $75. They'd come in, sit down at the $75 computer and play with it for a while, and they'd say, "Hey, this is cool! I think I'll buy it -- but I'll look at the $100 one first." They'd look at that one and say, "Hey, this one is even cooler, and $100 isn't too much money ... but I'll look at the $150 one...." He didn't have to give them any sales pitch at all; they'd sell themselves, and the most expensive computers he had (usually in the $800-$1500 range) sold the fastest.
I think that could work with knives if you set them side by side and let the customers handle them. No knockoffs on the table; they're deceptive -- they look better than they are. No doubt some people are going to go to another table and buy a knockoff, though, no matter what you do....
Come to think of it, maybe you could put one knockoff on the table -- one that's been used a little, so the edge won't cut hot butter and the lock is broken and one of the scales has fallen off and the joint wobbles all over the place -- with a sign explaining that's what knockoffs look like after you've used one for a week.