Let's take guitars. You can get a squire (introductory model), a Fender made in Mexico (intermediate, a few hundred dollars) or an American standard (top of the line, a few thousand dollars). Most working musicians I know will stick with the Mexican fender, because they know there's not much difference between them and the Americans (The Mexican guitars are quite nice), and you can gig with it without worrying that a scratch or nick will tank the value.
So who buys the American fenders? People in their 40s and 50s who play guitar, but not professionally. For them, the guitar is a collectors piece. The story behind the guitar matters more than how it plays. Don't get me wrong, American standards are great guitars. But unless you're looking for a very specific tone, the Mexican fender will do the job.