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What's the deal with designer labels?

I'm not saying there is anything wrong with designer labels. I'm a little picky when it comes to my running shoes, but why is everyone so picky about what kind of purse or clothes they wear? Does it really make that big of a difference? Aren't clothes pretty much all the same? Is it like an ego thing? What's your opinion?

Designer labels are for people who are very rich and live a certain luxurious lifestyle. These people just aren't at all fazed by spending a thousand dollars on a purse. For them, DL's are totally acceptable.

For the working class individuals who wear designer labels, it's merely a way to keep up with these rich individuals and be able to mix and mingle with people of elite status and to falsely exude eliteness, if even for a short moment (like clubbing, etc.). These people buy their designer duds online where they can get a discount. It's also a way to show the world "Hey, i'm important cuz I got a LV bag or True Religion jeans."

Funny thing is, the coolest individuals are the ones that wear $2 jeans from Salvation Army.