Well, me didn't go to any business school, but let's think a bit...
If China can make a luxury item copy for 10$ that looks so well as the original luxury item sold 1'000$, then the original is not worth much than 10$...
If people want to pay 1'000$ for an 10$ item, it means that besides being dumb, they DO want to be recognized as RICH dumb people...
If people buy fake luxury item, it means it's important for them to fake being recognized as rich dumb people, thus not faking being dumb (else they'd just get a no-brand item) but only faking being rich. So they're actually poor, nonetheless dumb people.
If you have too many poor, nonetheless dumb people carrying around the fake luxury items, then the true rich and dumb people ready to pay the luxury price will move to an other luxury item wich is more likely to show other how rich (and dumb) they are.
So now we know why luxury items makers need to defend their items.
We still don't know why so many people, rich or poor, are dumb and want to be recognized as such. But please, don't change the system too much, it's such a nice system to detect dumb people...