[...]why are the lenders willing to lend their real coins for some potentially worthless shit, especially if the liquidity pool can never be properly collateralized (which follows from your reasoning)? To me, it seems to be an extremely risky enterprise, given that the market can crash any minute which would trigger the domino effect leaving lenders with nothing but losses
I don't think that one side (coins supplied by lenders) is per definition better quality than the other side (collateral), all can crash. On Compound the coin with highest supply is Dai (996M, which would be more than marketcap of 445M according to CMC?). Dai has already exactly this problem, it's collateralized with another coin that can crash.
If total borrowed amount is small enough compared to marketcap of the coins used as collateral and compared to the liquidity of markets in which liquidation will happen and if (big IF) the system executes this liquidation fast enough, then yes, the pool can be properly collateralized.
If someone fears a crash but wants to stay in crypto, buying stablecoin and lending them out might still be the best option. (compared to buying Tether-like stablecoin and not lending them out)