I like used, cheap guitars for a few reasons:
1. I like projects. I enjoy taking them apart, figuring out what needs fixing, upgrading a few parts, and making them better. Cheap guitars are perfect to learn luthier skills on (i.e. make your expensive mistakes on cheap guitars).
2. As a beginner, I don't feel like I can justify an expensive guitar. I don't want to be that guy with $10k worth of equipment and $10 worth of talent.
3. As a beginner, you don't know what you don't know. My current collection consists of mostly used Squires and Epiphones. My goal is to get a decent example of what I consider the essential classic guitars (LP, LPJ, SG, Strat, Tele, Super Strat). This way, I learn what I like and dislike about each model. By the time my skill level can justify a "nice" guitar, I'll know that I am making an informed decision.
I've spent about $900 on the six guitars in my collection. With that budget, I could have gone out and purchased a Fender Strat as my first guitar. While it would be nicer than anything in my current collection, I wouldn't have ever learned that three single coils is my least favorite configuration (or gained the experience of doing three fret jobs, fitting four nuts, refinishing two bodies, soldering pots/switches, etc.). Sure I could have tried out a bunch of styles of guitars in a store before making a decision, but that isn't enough time to figure it out. As an example, the first time that I played an SG in a store, I hated it; the neck felt like it was four feet long. The SG is currently my favorite guitar. Point is, you don't learn these things without spending quality time with the guitars.