The mass produced cheap mountain and hybrid bikes are a good thing in my opinion. Some people miss the era of old ten speeds with DT shifters. I loved my old Schwinn Traveler that I rode for a while, but the versatility, durability, and user-friendliness of mountain bikes is fantastic.
I wasn't a huge fan of BMX once I got my first mountain bike. I think BMX was a worse fad since kids would have had more fun on cruiser bikes. A lot of the banana seat bikes had 5 speeds. There are mountain bikes for smaller kids but especially poor kids only ride BMX bikes nowadays. Very few kids ride road bikes, but I did run into a 10 year old kid riding an 70s ten speed a while back.
Also, aluminum is a wonderful thing. It made the BSO-tier bikes much lighter. They are probably cheaper grades of aluminum, but durable enough and affordable. You can buy a cruiser bike from Wal-Mart for under $100 that weighs 26 pounds stripped down. I don't see any reason to pick gaspipe steel over aluminum. If you have a good chromoly bike, sure. I had an old Pacific mountain bike (same as pic related) that lasted a very long time.