I don't know for sure, but I would assume their primary appeal would be to beginners or a younger audience. I would expect that a cheaper, more toy-like model would be ideal for use in a layout by children. Then again, I also think there's probably a market of modellers who buy the kits cheaply and then have kitbashing or detailing fodder.
In searching the Model Railroader site, we found very little references to HO Plasticville and we were wondering if there was a sort-of unwritten 'stigma' about the line.
Granted, they are not scale and they do look toy-like. And, they may not be considered as "models".
Where, then, is their niche? As always, many thanks.