Ah.. so the correct answer was [C], I'd completely missed the point !
Well, I think the most frequent answer to that is, people get into these projects without thinking them through - which is the complaint Gadge has most often. Folks get all fired up thinking they'll make some fabulous customised special, without any real appreciation of the technical and "other" challenges they are taking on - those "other" challenges being all the paperwork and regulatory issues of type approval, registration, testing and so on. We see it all the time, don't we, even with a relatively straightforward project such as importing a LHD car.
That's not a criticism, by the way, I am as guilty as the next guy of rushing in to follow my dream fantasy, only to realise months later I've spent a shedload of dosh on something that will never fly. We all do it, and if we don't, if we're honest we like to *think* we might do it one day.
In addition to that group, there are people who just like to create weird and wonderful vehicles, regardless of whether or not they'll ever actually be used. You only have to look at the USA west coast rodding scene, you can barely walk for tripping over custom creations built solely for show in some promotion, or as a film prop, or as a simple ornament for those who have more money than taste (that's a personal judgment of course). One example that springs to mind is a fabulous custom chopper that was built purely as a tribute to the NYFD friremen who died in the 9/11 disaster. As I recall, it was intended only as a showpiece in a reception area, maybe in the HQ building? I don't know.
Then there's a third group who do very much intend to use the vehicle, but not on road - only for off-road competition. The obvious case here is the Blitz dune buggy style off-roaders, but think also Taz Racing. Some of their conversions are road legal, but I suspect that is pure coincidence rather than by design. And didn't we chat recently about something on eBay that was designed primarily to be a hill climb car?
So I think there *can* be a point to knowingly creating a vehicle that cannot be used on the road, but I suspect that Gadge has it right in thinking that *most* of the time, it's the first group that prevails - people who chase a dream and haven't thought it through.