I will try to keep this discussion as much meaningful (even I doubt those would understand, who live inside Steve Jobs' reality distortion field).
1. Popular does not mean good. Neither is fashionable or good looking. For example: AIDS/HIV is pretty popular, drugs are fashionable, and majority of questionable human beings are not bad looking.
2. People are stupid (everyone of us), face it.
3. People do not buy good products. People buy good marketing products. Whether the product is good or bad does not matter. Marketing is a very powerful tool. Anything can be sold to public with the right marketing trick.
4. People buy things they do not need. If everyone only buys with really good reason, the economy system we have will shut down.
Now to help you reducing your waste of money, do this simple test (welcome to test your "friends" purchase decision):
DO I REALLY NEED TO BUY <insert product name>? Do I have at least one valid good reason?
Reasons like these are NOT valid:
1. because all my friends have this
2. because it looks nice
3. because I already spent too much on <insert name>
4. because it may do something or I may like it
@Goat Jam: I do agree with you that iPhone made mobile internet usable for general public. iOS might be the first proper consumer smartphone OS that is not retarded. I for long wanted to have a "smartphone" that I can take everywhere, and browser internet (and run other stuff). But none of those before iPHone was usable (ok, some are okay for 5mins). I wanted something that runs a proper OS with a proper browser. iPhone failed on the browser part, but it lifted the bar. Android learned from iOS, and give a (finally) proper OS, proper browser, and freedom to its users. That's why I bought Nexus One. If it wasn't iPhone, a proper smartphone like Google Nexus (looking forward for Nexus two) would not exist now (maybe some years later).