As someone who's neighborhood shop spent most of his summer building and fixing Walmart, etc. bikes, I've got no problem with them selling that junk, er, stuff. In the first place, the truly cheap ones are sold to parents of early grade school kids. Yes, they're dead in a year and a half to two years. Kids don't exactly take care of their toys.
I've discovered that the better Walmart bikes ($250.00 and up) aren't really that bad, given the expected market and price. Adolescents who use them to run around the neighborhood, adults who do leisurely 6-8mph rides around the neighborhood in the evening. They're heavy and primitive (the ubiquitous 7-speed freewheel), but the quality is respectable for the price. The Schwinn's are fairly good, the Next's and Rollfast's are garbage. And compared to some of the stuff I assembled last summer that was bought via Amazon or some other mail order provider, the Walmart product at least has a predictable quality depending on their price.
Besides, if you think Walmart (and Target, and . . . .) bikes are garbage, I wish you could have been around for the last Bike Boom in the early 70's. The stuff that was coming out of department, big box, and auto supply stores made a Walmart Schwinn look like a Colnago by comparison. At Adams Cycle we learned to dread anyone coming in with the Murray, Huffy, Roadmaster or (absolute worst of all) Iverson, asking us to make them work properly, and trying to explain to the customer that the best we could do is remove the Shimano Eagle derailleurs from them, and build a whole new bike around those parts. Iversons were the worst. It was not uncommon to have a would-be customer bring in the three week old Iverson with the steerer tubes sheared from the rest of the frame due to abysmal welding.