So American artists (I'm assuming you mean creative people who paint things) want to be paid a lot of money to make something beautiful, and so art made by American artists is expensive and pushed even further to the fringes of society by the economics of it. Thus, it seems to be that people who are buy art are at the intersection of the set of people who can afford it (few) and those that appreciate it (a lot).

This scheme as you so vehemently put it, is really aimed at getting more pretty things on people's walls. To do that, you need cheap and hopefully somewhat unique. Instapainting allows people to have both because they employ non-creative people who paint. I simply can't entertain the idea that the Chinese artists are being exploited by Instapainting by the very notion that they are being paid less than an artist would be in the US.