They're generally pretty terrible bikes, put together by some guy who didn't read the directions and doesn't care. They're so heavy and unpleasant to ride that sure, you could buy one for $150, but you'll never want to ride it. They're also full of false-comfort "features" like front shocks and heavily padded seats which sap your pedaling power and actually make your butt more sore, respectively.

No doubt they're less nice than more expensive bikes.

But in many cases, it just doesn't matter very much. If you only want to bike a few miles on flat ground, bop around the neighborhood, don't care so much about speed, etc., a low-cost bike should do fine.

American biking culture is traditionally the realm of the hard-core biker who races, tours, or bike-commutes long distances, and who obsesses about his gear, but there are many other sorts of bike cultures in the wider world (and indeed, "other sorts" are probably the vast majority, numerically). In many places, practicality and cost are much more important than optimal efficiency at high speed.

With biking becoming more and more mainstream in the U.S., at least in urban areas, American biking culture will probably shift towards a more casual stance too...

They are the bikes of choice for undocumented workers and people with DUIs, who in many areas make up the largest adult bicycling populations.

I'm suspicious of bikes that sell for under $200 new, but you can get a great used bike in the $150-200 price range, which is what I've generally done. Add about $100 more for lock, lights, fenders, rack, and basket and you're good to go.