Premium is about price, as in "paid a premium". Dictionary.com definition #11: "of higher price or cost".
It also has the meaning of higher quality, but mostly associated with the price and exclusivity (or perceived exclusivity. Premium products, like shoes and clothing, can also be had by millions of people -- it's just that not everybody can afford them easily that makes them "premium").
So being overpriced is not really ar argument against it being "premium". If anything, it's the opposite.
>People are simply buying them as a fashion item!
The Beats are OK-ish sound wise, but not for audiophiles. Newer, more upmarket versions, are a little better sonically however.
Interestingly, they make for useful monitors if you are a musician, in the sense that tons of your listeners will use the same cans, so you get a sense of what the final master will sound for them.