Exactly the same cause as those exploding 'hoverboards', demand for the product is very high but people don't want to pay for quality. Quality in this case meaning proper batteries, chargers, voltage regulators etc that would actually have a chance at passing safety regulations in the US/Europe. Instead you get dodgy factories in China cranking out shoddy knockoffs that flood onto ebay and unsuspecting people flock to them thinking they've got a bargain.
This sort of thing is a well worn topic in flashlight forums, look up 'fake ultrafire batteries' for an exciting odyssey of discovery that will make you never want to chance buying cheap junk ever again. The bigger issue is a sort of self fulfilling prophecy where the sort of person that researches these things before buying is also the sort of person who wouldn't fall for crappy products in the first place. The unfortunate victims are the type who know nothing about this and go onto ebay and grab the very cheapest thing they can find. I can't blame them since the worst knockoffs also tend to be the ones that do their best to impersonate good ones, the descriptions being full of hyperbolic claims about 'the very highest quality product 100% satisfaction guaranteed 1000s of happy customers' etc. Again if you read that and your BS meter starts to tingle, you're already well enough informed to know to avoid these things. Can't say the same about someone who honestly just wants a cheap ecig without wanting to spend hours reading, they're the prime target for unscrupulous sellers.