The other poster is right: half of the reason people BUY these things in MMOs and on the SA Forums is because of social status. I doubt many people would buy a shiny Sword of Infinite Destruction +5 in their MMO if they were the only ones who got to see it. People are by nature vain creatures, and if you give them a chance to pimp out their gear and appear more elite than the rest, it's a big bump to the incentive to purchase.
This works great in social networks or game worlds - not so great if you're running a site that does poll aggregation technologies.
I concur; if you study MMOs carefully (okay, not even that carefully), you will notice that the most successful ones tend to be loot-oriented ones, and after a player has hit the level cap, the reason they keep paying their subscription is e-loot, and to a lesser extent, e-friends.
This works great in social networks or game worlds - not so great if you're running a site that does poll aggregation technologies.