I always got the impression that it was largely things with a long shelf life, to minimise waste. Which doesn't discount what you've said, but just worth asserting that it's a subset (not always healthy) of regular grocery stuff AND in smaller packages.

I would say 90% of the food in dollar stores is high in oil, salt, or sugar and most of the time all three. I have seen a few with decent staples such as wheat bread, eggs, meat but that is small pct of all foods. Rarely vegetables (or ever). Would be hard to eat healthy if good most of your food there.

Regular supermarkets have plenty of bad food but still wide selection of nutritious food.