I really don’t find Apple’s ear buds to be all that bad. Yes, they’re clearly not comparable to my Bose ones ($200) or to the latest set with a name I can’t remember ($15 at Staples on clearance, but the normal price is $80). But Apple’s are still much better than the cheapo ear buds that came with my Palm Tungsten (10+ years ago) or with my tablet (from last month).
As something that’s bundled with the iPhone/Pod, I keep a few around as a backup and occasionally use them. If I had to buy a replacement, I’d certainly look at third-party brands first.
As for why I see people still buying or stealing them: a lot of headphones are a status symbol thing at this point. Apple’s headphones are uniquely white, so they advertise that you’re using an iProduct. Beats by Dr Dre is much the same… overpriced, but clearly recognizable for those who value conspicuous consumption.