Are Replica Watches Getting Too Expensive?

I follow several forums and I read the wanted and for sale sections regularly.  There seems to be a trend going on where people are selling replica watches for more than $500 a piece.  These watches typically have extensive modifications to them to make them more accurate: new crystals, anti-reflective coating, new dials, etc.

My question is: are these watches really worth it?  Is spending $800 on a "nearly perfect" replica Panerai a better choice than spending the same amount on a Renato Vulcan or a nice used Omega or Sinn?  Personally, I don' think so.  It's my feeling that people are missing the forest for the trees.  At some point the cost of a replica watch exceeds its' value.