Not everyone cares to research and become an expert on audio quality. Your standards doesn't have to translate into others having the same standard. Remember, most people are upgrading from bundled-in earbuds, so yes there is going to be a tremendous difference in audio quality.
And you're not exactly right about their sole purpose being to provide premium sound. Beats are also about the fashion and prestige, and there's nothing wrong with that. Again, Beats have gotten the mainstream to consider even spending any money at all on headphones, which is only a good thing. After people have a good experience with Beats, some of them might start to research more and learn more about audio quality and discover higher quality brands with lower price points, which leads to them buying more headphones from other brands.
Again, the irrational Beats hate from people like you is just silly and childish. I myself am an "audiophile," but I'm certainly not a snob, and can appreciate Beats for what they are.