so why do people buy these contracts?
Mostly ignorance and their want to join the "crypto hype train". The same reason why people frequently get tricked into investment schemes. Even a quick Google search would immediately let them know how bad of an idea paying for cloud mining is.
Pretty much yeah.
OP suggested that people buying contracts because they expect price of bitcoin to go so up high that they're going to be in profit eventually.
But most of the time people sleep on doing math, relying on their expectations and assumptions