'WalMart' bikes fill a niche for low-cost bicycles. There are some people who rely on a bike for their only transportation, and they might only have $150 to buy one. We have a few temps at work who fall in to that category. They rely on their NEXT's and Huffy's to get them to work every day.
If you're in that situation, you don't have the time or money to shop around, so you take a bus to WalMart, buy a bike, and ride it home. Yeah, you know that there are better bikes out there, but you get what's in your reach.
If you don't have the knowledge or skills to evaluate/repair a used bike, or the money to pay some one to do it, you need something with a return policy, like post #67.