If it sells, it sells. I have roughly 50 demo tapes in my collection, all advertised as working by the sellers, and only one had any kind of problem (which was fixable and worth it due to the obscurity of the tape). If I had shittons of cash and there was, say, some totally-forgotten Exodus bootleg from 1982 on tape, and the alternative was just hoping that the collector that bought it would eventually rip it, I might pay hundreds.
For the guys that seem to list the same tapes for years on end without a buyer, yeah seems weird, but whatever. I've never tried going after those because they're outside of my price range, but I've heard anecdotes online of prospective buyers contacting them and getting a sizable price tag reduction.