TL;DR - Shack designers who submitted for the competition failed at "customer development". They didn't ask how the customers use cheap dwellings now (store tools, build stuff, & upgrade).
Whats the problem? name any product and I can find an argument on the side of nobody choosing to use it.
I, for one, have a use for a 300$ house. I have a piece of land on which I would love to be able to place a few smaller cabins. Currently doing so would run me around 15-50k per building.