I don't know why, but I saw something tonight and it immediately made me think about this thread. Excuse me if this has already been mentioned here...
For many people, bikes are their only mode of transportation. I'm not talking about people who choose to only bike, I'm talking about people who don't have a say in the matter. For instance, the homeless population - or other members of the population who can't afford a car. Especially in "rural" towns like the one I live in where there is no form of public transportation, having a bike may be the only way they can get around.
For a large number of those people, they can't just go to a local bike shop and pay out $1,000 on a bike. They're looking for something cheap and will do the trick. For many of them, Walmart (or other department store) bikes - eh, BSO's - fit the bill. They may find a Walmart bike on the curbside or trash somewhere and "adopt" it.
I think it's very easy to forget about that population. I met a guy tonight who was using a Diamondback mountain bike as his primary mode of transportation - rode it to a restaurant even though it's just around 32*F outside. At a former job I had, a guy rode his bike in the rain to my place of employment to inquire about a job.
Just because many people have Ferrari's doesn't mean there are people out there relying on Mitsubishi Mirages, Yugos, or Ford Pintos because that is all they can afford.