Apologies for the low resolution. It was a mobile ad and all I could get was a screenshot.
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The ad aside, I just don't understand the appeal of paying $3,000 for a handbag when a $20 handbag will can do just the same thing. The only thing I can think of is people think they look cool or rich or better if they have a Prada handbag, but frankly, who gives a shit what kind of bag someone has? And second of all, if I saw you with one I wouldn't think you are cool at all. I would think you're the dumbest person alive.
While it's true that you hit a point of diminishing returns, there's a sharp divide between, say, a $200 bag and a $20 bag. Technically a plastic shopping bag will serve the same purpose as a purse, but it's likely to break in less than a day. A $20 bag might last a few months of daily use if you're careful, but it's going to have cheap/non-durable materials, have cheap findings, and be poorly made. At $200, the odds are pretty high that it's going to be well made, use solid materials that will last, and have fittings that aren't going to corrode, fall off, or break in a few months.
I have a designer wallet that I've used every day for over 15 years, and while it looks beat up, it's still fully intact. I averaged about one every 3-4 years before I got this one.
See also: Cap'n Vimes boots theory of socioeconomic unfairness.
I got obsessed with designer replicas - I didn't buy many but I loved looking at comparisons on repladies.. and the cheaper dupes were often much better made and quality controlled than the authentics. We're still talking a few hundred for the bag but the genuine ones can be 10 or even 100 times the price. I know this isn't what you were talking about btw. It's definitely better to spend a bit more on a bag.. or anything, for quality!