There are a few angles to this. In the past, if you made interactive computer-based art – you either sold it through game channels or you really didn’t have a way to sell it. The tech behind these things isn’t much different from game engines. There were a lot of people making generative art and then selling prints. It’s challenging and expensive to get the prints made and to ship them, etc. The NFT ecosystem is just a way for people to monetize computer-based and/or digital art in a decentralized way. From the perspective of people who have been involved with interactive art and who enjoy working on it, there finally are platforms that allow them to monetize their work.
In the generative/interactive art community, this is exciting for reasons that go far beyond scarcity. @sharaleo is correct that scarcity can drive up prices, but if you do not have followers and/or are not recognized in the community, then scarcity doesn’t help you at all. You have to build a presence, publish good work, be recognized as a competent artist in the field, and then scarcity helps. Add to that the fact that there are a lot of people who made massive amounts of money on cryptocurrency and you have an entirely new breed of “collectors” of art. These are where the crazy high prices come in.
For some peon like me, I can make a generative piece, put it on sale for $2, and a lot of other generative artists who are excited about having this as a platform will buy it. I’ll buy their work, etc. It’s a way for the community to support each other. Keep in mind, it is the VERY early days of all of this. It’s going to change radically and fast.
So when you say “Why no sell it en masse?” Well, that’s one option. Generative/interactive artists can list their work for free, make a million copies, let everybody collect it. Or sell a million copies for $0.10 each. What does come with the NFT ecosystem is that creators of pieces get a percentage cut of secondary sales. If I set that at 10% and then give away something for free… if the buyer turns around and sells it for $100, I get $10. That type of secondary market income never has existed before. It will be interesting to see where it goes.
I don’t really expect this to make sense because it doesn’t all make sense to me, either. It’s new and complex and surfing on the back of the bizarro world of cryptocurrency at the moment. However, it does open a new market for people with some interesting skills as artists, so it will be interesting to see where it goes.