I think that giving people a camera with SOME controls, and SOME education would go a long way to helping people get into it, just give them a few settings like the old Kodak folder cameras, 1/100, 1/50, 1/25, B, T ... that way they LEARN something and become more invested in it by having "elite" lost knowledge...
How does this make LOMO at fault? You are talking about people who bought a film camera and didn't even get their film developed because of the cost... Do you honestly think they would be better served with a "nicer" camera? Hell they could have shot with a Hasselblad, that won't change the cost of development. If the Holga/lomo cameras weren't available to these people they probably would have never shot any film at all. I would be willing to wager a large sum of money that most of the people who gave up on film after using the Lomo cameras would have given up after using any other camera as well. I for one love Lomo even though I don't own any of their cameras or have any plans to, because it means more people shooting film.
In addition to being a photo nerd I am also a Hi-Fi nerd. I belong to several forums dedicated to that pursuit and for the last several years I've had to listen to a bunch of guys on those sites complaining about the "hipsters" buying up vinyl at the local record stores. Never mind the fact that until those hipsters started buying the vinyl most local record stores were closing up in droves. And never mind the fact that without those hipsters buying records most bands wouldn't be releasing new albums on vinyl. All they can see is young people who are excited about something but are doing it "wrong" and thus must be shunned and/or made fun of. I see a lot of that same mentality around photograpers.