I understand the busker metaphor, but the $100/$500 donations we hear about most often are to successful streamers, so it's more like throwing $500 at Axel Rose. That's the bit I find interesting.
Such donations strike me as unusually altruistic for the demographic involved, in a way that we don't see en masse in other public online venues (such as on YouTube, donating to open source, Instagram, bloggers, etc.) I'm quite interested in learning more about the psychology around that because I think other arenas deserve it too.
But not that odd: I’ve backed people on patreon because I liked what they do and wanted to reward them - even though they were already making good money on it - and then never actually accessed the rewards. So I do get it.
If you feel they provide you with $500 in entertainment and you have a spare $500, then it makes sense.
That's like asking "why would you go to a casino when you know casinos make lots of money?"
If you're watching Larry David's shows the business transaction has already taken place. Larry David doesn't stream his shows for free and give you the opportunity to give him donations in exchange and then thank donors during the episode.