I think some just have the extra money lying around. The really bogus ones you see are probably stolen credit cards. And the competitive spirit also, it's really true. Ever win an auction on a product that's on the auction for much less than retail?
btw, finding good deals and selling them on auctions later is a pretty cool way to make money. I made well over 2x what i paid for selling PS2 which i got for under 250 each.