Regarding the fake bag/fake diamond issue, since there's nothing inherently proprietary about a diamond, I don't see why it's problematic for people to buy fakes - it's not the same as a designer item or a patented cut. To me, copying a designer bag is more like copying a designer setting, like the T&Co solitaire or all the "inspired by" designs that exist and look identical to the original. And to tell you the truth, as long as the copy differs slightly from the original and is being represented as a copy, I accept that, because beautiful things will always be copied - it's just the way it goes.
Dare I say what I REALLY think? I think that those, like myself, who prefer the "real thing" (watches, bags, diamonds, etc.) get a bit miffed when so many wear copies and get the same "street cred" as those who shell out the big bucks for the real thing.
That's why so many people get all clenched when they find out a friend or relative has been wearing a sim and fooling everyone. All the judgment comes pouring out - it's like they feel their own luxury item has been devalued somehow.
For example, my dream watch is a Cartier Tank Francaise. SERIOUSLY makes me drool. I have loved it for years and will have one some day. I would not get a copy. I only want the real thing. If I spent all these years pining for it, and saving for it, and finally got one on my wrist, just to find that some friends (for example) had bought really good knock-offs that no one could tell apart from my precious original? That would tick me off (pardon the pun), and it wouldn't be because I was outraged about their heinous violation of copyright - it would be because it simply takes away from my own pride, accomplishment - bragging rights.
I used to wear sims. I did so because I couldn't afford a diamond in the size I wanted and it gave me a sparklie fix. I never went to great lengths to pass it as real, though I certainly didn't shout from the rooftops that it was fake. And when I did have the means to buy a real diamond, I did so. I have many friends who were sims for a variety of other reasons and I look at a well cut cz (like Wink Jones sells, or Asha) as a beautiful gem in its own right - it's just not for me.
There will always be designer copies and diamond copies. The quality will never match the original because you get what you pay for. Everyone should just buy what they like and what suits their needs!