Ever go to a mall and see all those little carts selling things? You think people go online to verify whether those carts are selling the real deal? What about products purchased online through Amazon, Zappo, etc?

Also, there is a whole world of non point of sale branding. When you give a gift, you pony up for a real Kate Spade bag instead of a perfect knock-off (which are probably made in the same Chinese factory!) You might get those awful D&G glasses with the obvious branding instead of a perfect replica. A lot of the value of branding is rooted in the fact that humans are basically monkeys and we buy products to show the brands off in our social circles. A lot of people would knowingly buy knock-off D&G glasses if they could get the same effect for less money.

Now, I'm not arguing that this would be a bad thing. It'd save parents a lot of money if their kids could show off their "Nike Swoosh" shoes without paying a huge markup for something made in a Chinese sweatshop. But the fact that we can't do that is certainly quite valuable to Nike (and D&G, and Ralph Lauren, etc), and the inability to protect their brands in that way would certainly reduce their incentive to invest so heavily in them through advertising.

You're right. For many branded products (especially clothes and shoes), consumers would indeed prefer to buy cheaper replicas good enough to fool their social circle. If they had the freedom to do so, then yes, Nike would lose much of their incentive to invest in advertising their logo. And yes, that would probably be a good thing for parents. And the only advertisements remaining would advertise quality instead of exclusivity. Or maybe Nike would come up with a way for someone to authenticate someone else's shoes. I don't see how they could do that though.