In what way is it a problem exactly? are counterfeit cards printed with unreadable font? do they fall apart when used? oooh, you mean its a problem for speculat^^^^investors, not for actually playing the game?
Maybe the next response to that is "who cares about tournaments. Just play kitchen table magic with your friends." In that case sure, but still don't use counterfeit cards. "Proxy" cards are when a player prints out (or even hand-scribbles on paper) the image of the "real" card they want to use. No one is scammed out of money. It doesn't cost anymore than a sheet of printer paper and some ink. And because the card is obviously not official, there's no confusion as to it's authenticity.
Never mind things like a black lotus which is over powered but still legal due to rarity.
From a gameplay perspective, the problem is exactly what your parent said: counterfeit product cannot be used in a sanctioned tournament. Which means most MTG organized play, since even very small in-store tournaments are usually sanctioned events.
In addition to counterfeits not being tournament playable, they are not collectable either. It feels good to own/play cards which are rare, valuable, and a part of MTGs history.