People are social creatures, and have a strong innate desire to stand out and express themselves. If a game successfully creates a social atmosphere, selling cosmetic items can be a lucrative business.

It's essentially the digital version of the fashion industry, which most people seem to viscerally understand-- aesthetics are the primary motivator for most people's clothing choices, and they are willing to pay a significant premium for some items on this basis.

There's a whole genre of Fortnite pros trolling as defaults on Youtube.