Because people still watch it and it's relatively cheap to produce. Don't feel bad for the gullible, if it wasn't for them, Sham Wow wouldn't have any customers.
Every once in awhile an article about psychic fraud gets in the news. Sure, the psychic should spend some time in jail, but for fraud not for running a psychic business. Most states have laws on the books that sufficiently protect folks from bunko artists, psychic or otherwise.
Passing laws...