Main problem is with the people who will spend crazy money on a gen. They want exclusivity, ostentation. They seem to have a need to show wealth and what they believe is superiority.
I think you are projecting there. I'm sure wealthy people buy high end items for all sorts of reasons. Say a few million landed in your lap. You wouldn't buy the watch of your dreams just because you wanted it?
Actually showing off, to me, is a middle class attitude. Like, see I have a Rolex and a BMW because I'm awesome and successful at my job, etc. The super wealthy, if anything, seem to hide their wealth.
Back to the original post:
Reps do not devalue gens but maybe the tens of millions of dollars spent on rep products would have been spent on gen products. If anything, Seiko and Invicta loses more than Rolex every time someone here buys a $200 rep. Hermes isn't losing anything when someone buys a $200 Birkin but maybe Macy's lost a $200 sale on a bag?
Personally, I have been tainted by some super reps such that I'm not sure I could ever spend thousands on a watch again. The super reps that have pushed me to the dark side are:
TC Sub - It's so close. Why spend $5K on a gen when $700 gets you this rep with a gen insert?
SSD - I was lucky enough to score two Super Sea Dwellers with Swiss movements out of the classifieds a year ago. With a TC Sea Dweller bracelet, these are every bit a super rep as the TC Sub.
Planet Ocean v5 42mm - It's so close out of the box. I have a gen Seamaster and I'm not sure I see a $2K difference between the rep and the gen.
PAM 288K - when you compare the rep to gen, you find no differences! The gen movement is based on a Valjoux 7753. I couldn't see myself paying $8000K for a watch with a $400 ETA movement inside now that I've seen how close the rep is.
I feel the same about watches using the 6497 or any other off the shelf ETA movement. I'd never pay big $$$$ for one of those.