I say it is an easy way for spectators to become participants in the Games. These shiny souvenirs are fun to look at, easy to carry, and really not that expensive to collect. Sponsors hand them out like popcorn, and the local organizing committee makes a significant amount of revenue from licensing the Olympic images.
Official pins must have one of the following three marks in order to qualify: 1) Olympic rings, 2) the LOC symbol (in Vancouver it is called the Anok-Shok) or 3) an image of one of the Games' mascots.
Personally, I enjoy the opportunity to use my lapel pins to engage a stranger in conversation, or to put a smile on the face of a young boy or girl when they take home their very first piece of Olympic jewelry.
There is an unofficial protocol to pin trading. It should always be done in the spirit of fun (not profit) and no one should feel bullied in to the bargain. Some traders carry big shiny pins (called "lures") that draw attention to themselves and the "keepers" are quickly put in the pocket. "Traders" are usually something you have two (or more) of, and "sweeteners" are non-official pins that you can use to up the offer to get the pin you really want. Kids like collecting the mascots, business people try to gather as many sponsor pins as they can, and the athletes and media often trade among themselves because they are the only ones allowed into the restricted areas like the village or venues. My wife likes all shiny pins, so what I lack in numbers, I make up for in "bling." It's an Olympic hobby I wouldn't trade for the world.