Scotland needs the tourist money that these type of shops generate. The tourists have to stay somewhere, they have to eat somewhere and they have to visit places because they are tourists. Part of that tourist experience is the 'Tartan Tat' shops - they expect them. And if they can't find them in Edinburgh, they will go to somewhere else in Scotland where they can be found.
Yup. They may not like that these "cheap kilts" are cheapening the tradition of kilt wearing or turning it into a touristy costume, but I'm sure they do love the income they gain from taxes. Cheap and available tourist "tat" equals profit for government and the community. Like it or not, such "tat" has been a boon for everyone involved. And the Almighty Dollar (err... Pound?) always wins.

Personally, I think inexpensive kilts, casual kilts, and all variations of the kilt have their place in allowing people to share the experience without breaking the bank. Those who take to kilt-wearing will usually find their way to a bespoke quality kilt in the long run.