I'm a little troubled by the notion that someone is "wrong" to purchase lesser quality and thereby lower priced goods in any category including bikes.
As am I, except when it comes to safety, which appears to me to be the issue with LLPiper's approach. Someone with a history of ortho problems shouldn't be tempting fate by using an ill-fitting bike.
the kid who has to work and buy his own needs to be able to go to Sears, Target, or Wal-Mart and get what he/she can afford just to get started
No argument here- I think that the cheaper bikes have a place, as you suggest. If they get people into the sport, or get them out on the road or trails riding, that's a good thing. Except one point, and that's responsible riding behavior. Although I've seen plenty of bad examples of this among people riding $4K CF bikes, I'd venture to say that most of the people out there exhibiting unsafe behavior (riding on sidewalks, running red lights and stop signs, and displaying general ignorance of basic bicycle safety) are riding department store bikes. At least that's been my observation here in a major East Coast city.