I think it's a complicated issue.
Yes, some women buy the fancy bag as a pure status symbol in the same way they wear ridiculous shoes because they want to be fashionable. Dumb, but they do it. It's the same with a fancy home, watch, car, jewelry, vacation plans, wardrobe, shoes...etc. isn't it?
Personally, unless I win the lottery, I'm not going to focus extreme amounts of my income on purses. I adore them, I've sold them (Chanel, BV, Ferragamo, LV...etc.), but it certainly doesn't make me any better than the next person because I decided to aim some discretionary income at an LV Babylone tote. I bought it for ME and ONLY me. LV will last, I can carry it for years, and I'll probably have to leave it to someone in my will. If I cared about status, I doubt I'd be carrying it while I'm wearing my yoga pants from Target, and the fleece jacket from Wal Mart. LOL
Having said that, the marketing is hot and heavy for purses, and now that companies know to put their bags directly into the hands of socialites and celebrities to hopefully create the next "it" bag, well, the demand is going to be high. With some people, it will be to copy the celeb (for example: Kitson is backordered for the $$$$ turquoise horn necklace Nicole Richie has been seen wearing quite often). With others, it's just cool to have something you adore. IOW, it speaks to you. It does make me wonder though if anyone would know or care about Kooba (among others) if they hadn't marketed themselves so well--and I do like the bags depite their cost and being manufactured in China.
There was an article awhile back in one of the fashion mags about how luxury goods are going to increase in price because you have more and more and more people around the world with money who want to spend it on something they can now afford.
Now if you want to get into whether luxury items are worth the price, or if it's just about the marketing and fancy stores....that's another post.