Yup, they are... in my opinion. You've hit one of my favourite topics.
Back when "Lomo" wasn't such a fad, I used to see Dianas and Pouvas at the fleamarket for almost free. Sellers even used to offer them as a little free extra when you bought something else. Now they cost about as much as a modern SLR in good working condition, though they're still the same cheap pieces of plastic... Why? Because some hipsters think, they can buy some kind of "lifestyle" with these cameras and are willing to pay for it. It's a free market and the demand is big enough to justify the ridiculous prices.
When you buy them directly from the lomography shop and not used, it becomes even worse. These things (Holga, Lubitel, etc.) cost almost nothing to produce, even less than the shipping to Europe or the US, but the shop can have a profit margin of several hundred percent and still sell loads. I even built a few cameras that took similar pictures from cardboard boxes and scrap lenses - it's not difficult or expensive at all!
Of course, there are a few nice and innovative cameras like the Sprocket Rocket or Spinner that can't really be substituted by anything. There are other panoramic cameras, but they're much more expensive and aimed at a completely different demographic.
Quite honestly, I don't understand "Lomography"... don't get me wrong, I love some of the results, the style of shooting and the fact that it brings people to analog photography. I think, I could be classified as a "Lomographer" myself some of the time, but the whole "scene" is a complete mystery to me. Just can't get it into my head, why people go so crazy about it.
/end of rant. Lomography-Hipsters please don't feel too offended.