To be objective, low end bikes fill a niche.
Some people want to try something new without making the $$ commitment and maybe do not have the tools/know-how/patience for a cheap conversion (Look around BF).
Some just can't afford a nicer bike or don't want to have to buy a $$ lock system and worry if the bike gets stolen (Again, look around BF).
So you could buy one, slowly upgrade/personalize it, learn about maintenance and adjusting bearings (you'll need that) and then when you can afford it and decide you like FG transfer the components to another frame or conversion.

I think it is a great option for HS/college kids.
Will the cool kids snicker when you roll by? Probably.
Will you care? That's up to you.
If you are fast enough it doesn't matter what you roll on. I do centuries on a dumpster conversion and I pass a lot of carbon.

I would much rather see a Wmart fixie on the road than a Schwinn Varsity conversion.

Whatever get's people on bikes is a good idea to me.
I'm planning to travel to China this year so I will probably buy one at the Wmart there and then just give it to a friend or aquaintance (it's cheaper and less risk than shipping a bike).

Enjoy