It's just a way to finance a start-up. Sure most ICO's are scams, but surely there are a few gems. The way I see it, it's a way for a common man to become an angel investor. And just like with angel investing, most start-ups fail. But you could get lucky. Of course one should always do some research before investing. Figure out the history of the team members, check the source code commits if available, believe the use-case adds some real value, etc…

If I would join an ICO I would probably not spend more than a few hundreds of dollars on it. Something I wouldn't worry about losing.

A start-up that doesn't make anything, and the effectively sells the same product as all its competitors.