Short Answer: The whys can just be boiled down to gambling, weird investing, flexing wealth, sports fandom stuff, or wanting to invest in your hobby.
Long Answer:
It is a bit of a perfect storm, and you'll get a lot of mixed answers to this, however these are the reasons I see roughly in order of their impact.
1. Skins are the vehicle for gambling (you bet them instead of $). The loot boxes definitely get people hooked, but the skin gambling arena is a whole different beast.
2. Valve, whether by luck or skill, created a perfect system of scarcity. I can elaborate a lot on how this is done. The rarity of the skins is one thing, but the float system giving each drop a mostly unique appearance causes a 2nd tier of scarcity that adds a lot of value. They hired a bigwig Greek economist to develop this system.
3. The market has been stable-ish for long enough that some people view it as a legitimate safe investment. I have heard this is very popular in China, but I really don't know how this behavior is spread out globally. I have a friend with over $100k in the market (well, he did before this).
4. Almost everyone I know who plays seriously has at least invested a small amount in the game. I play with roughly the same 8 people, and 7 of us all spent $1-2k on the game, with inventories ranging from $1-5k.
My impression (?) was that he (Yanis Varoufakis) was more involved in the overall design of the Steam Community Market than the CS:GO skins system, but this is what the other commenter was referring to:
This is what I'd like to know as well. $20k - $12k at "dumping stock" prices! - for a digital item for a video game is just incomprehensible to me.
But clearly it's happening, so I'd like to understand better the venn diagram of people who have $20k completely disposable and people who are so highly motivated by their appearance in a video game. My assumptions are obviously wrong.
There is a number of wealthy individuals who whale on video games. Thats at least a part of the venn diagram. Having money doesn't remove your vanity.
But the skins are also used as a money substitute for gambling and as an intermediate item to exchange money between currencies. The skins "just happened" to be a stable enough store of value to create secondary markets.
Because in this case the value can change overnight, and Valve doesn't otherwise have control over the market (value) of the items.
Expensive clothes aren't much more expensive to produce than cheaper ones, but it is known that brands like Louis Vuitton will destroy old stock rather than put it on sale. Some products are intrinsically valuable though, because production can't scale as well - some cars (although a brand can do a new design and mass produce it), watches, semiconductor manufacturing, etc are constrained due to their complexity.
