People that buy fakes are not going to all of a sudden drop $7,000+ on a watch. But I do agree that the fakes do help establish the real deal's presence in the market. People that will buy a fake generally don't have the means to buy the real thing. Nowhere close. People that buy the real thing wouldn't be caught dead in a fake.
I think that there are two very different kinds of people that buy watches. There are those who come at it from a rational point of view that say "If I can buy a high quality swiss replica of a rolex at 1/10th the cost, why not? I'm surely not taking a 90% dip in quality"
Then there are those who care about heritage, movement, and absolute precision, and price is not an issue.
I have a hard time believing that there is much crossover in these two markets.
Myself, I understand the draw of a replica. But I choose to own authentic items within my price range. I have a very simple Raymond Weil. It has no bells and whistles, it has the sort of understated elegance that I enjoy, and initially I was left wanting more after seeing other watches with so much presence. But then I realized something, the people that compliment me on my watch are people that understand and love watches. I once was told that my watch looks like a piece of crap from a girl that was showing off her new Michael Kors watch to me. Honestly, it made me love my watch more.