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:
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.