1. Things can be niche because there just aren't that many people who want them, rather than because you couldn't make them cheaply if there was demand. A good quality Videodisc player for example costs far more now than it did at the height of the format, because only weird retro collectors want one so there's no reason to mass produce them. Videodisc players are niche.

2. We're talking about literal space, it can actually fill up. Some orbits are either so low that everything de-orbits soon enough anyway and needs replacing, or so high that we'd never conceivably fill them, but in between are plenty of useful orbits that are finite, so filling them up with more crap doesn't make any sense even if you could do it for free.