Personally I have resorted to buying GW kits and Magnetizing them then reselling to make a profit to be able to afford the models I want to buy for my armies and collections. Example I buy a $50 box of chaos terminators (for $40 a 20% discount from thewarstore) and magnetize all the Weapon Arms to the Torsos, Torsos to Legs, and Heads to Torsos then I resell it for $100 . They do sell I cant make Magnetized sets fast enough. But I only do it when I need more hobby funds.
People buy them because they like the flexibility and customization of being able to change their models looks, poses, and load outs with out having to have to spend another $50 to buy another set because you made all Close Combat Terminators and decided you don't like that play style anymore and wanted to kit them out for more ranged attacks.
Personally I love to magnetize most of my models...sometimes to extremes you can see what I have been doing to my Death Guard army here...http://www.warseer.com/forums/showthrea ... ost5718512
Now on the topic of personal recasting of bits for conversions and stuff I think its perfectly fine and legal as long as you are not doing it to sell or make a profit...that is the turning point where it really becomes illegal.