"why is it that many organisers imagine that booking 'big names' will draw people into the festival?"

Because they do.

There is a big difference in going to a Festival to see big artists and going to a festival just to go to the singarounds.

There are many people who don't want to pay to see the artists, so they hang around in the sigarounds.

Here is a good example of a very good festival that provides both and yes people do go becuase of the big names, but they also go becuase it is well run.

http://www.southwellfolkfestival.org.uk/