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Personally I only see people who buy these illegal guitars as just wanting the name on the headstock so as to impress others. What other reason could there be with all the good legal import guitars on the market.
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If you're young and starting out playing and don't know any better. It would be a tempting buy. If it played half way decent. I have no clue. I just know when I was 17 and starting out, I could've gave a rip if it was "authentic" or not. Just wanted something to play and not a lot of money. It doesn't always have to be about impressing people.
I don't have a lot of experience with "knock offs". But my Neighber has some kind of strat knock off and it's really not that bad. Hoffner maybe? I mean it's not that bad playing. I never played it through an amp real loud to know how the electrics are. I had 2 epiphone Les Pauls in my day and I could always tell they weren't as good as a real Gibson. But sometimes you get lucky. I hear that sometimes a Squier can be real good and I've played a few that seemed really decent.
Anyways.... that's my 3 cents.