Why do we have a market for fake designer goods

Hindol Sengupta, wrote a piece on the IBN blog called "Poor Me And Expensive Clothes" on why he thinks most designer stuff is overhyped and overpriced, and that only like about 0.0001 percent of people can afford it, maybe even less... Poor Me And Expensive Clothes

But IMHO thats the whole point. If you are wearing it, you are sending out the message that you are in the 0.0001 percent. And thats whats important.
A lot of people (especially the smarter ones) understand that you are paying more for the brand than the clothes; that you are essentially paying for the advertising that entices you to buy the brand in the first place (Just like coca cola and pepsi), that in most cases, were you to know a good tailor and got some decent material, you could get it made, to better fit, for a tenth of the price.
To know this you just have to look at the fake designer market.
A 2006 report by Davenport Lyons, a UK law firm, says that 12% of the UK, bought fake luxury brands, and 48% of the UK bought a look- alike: items that closely resemble or mimic the styles of luxury and designer brands.
The situation in Europe is not much better...
As much as 20 per cent of the clothes bought in Italy are fakes, according to a report issued by the Italian consumers association Intesa dei Consumatori in April 2004.
And in case you thought that its the sleaze bags who buy the fake stuff, the Davenport report goes on to say that "Contrary to popular preconceptions, those who have bought fakes are actually more likely to be genuine luxury goods buyers, as well
as higher spenders in some key categories"

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Turtles live 'twixt plated decks
Serving to conceal their sex
Thus their sex appeal is lost
Fashion's seldom worth the cost
* Based on the writings of Ogden Nash © Steve Smith & Edward de Bono Creative Team 1998