I've been to the Maryland Ren Faire twice, and I was also invited a few years back to sing at the Calaveras Celtic Faire in California. Both left me reeling, as someone who is married to an actor who makes most of his living out of historical interpretation (the professional branch of re-enactment, I suppose). On the other hand, they were both fun, once I left my "is this supposed to be serious/accurate/historical" attitude behind.
I don't have a problem with it, and it amuses me. I'd like to say the classic British line of "only in America ....", but I have also seen a beautiful mullioned window in a beautiful old pub in Stratford on Avon containing an advert which said "traditional pizzas", and I've also (because of my husband) attended several multi-period events and traders' fairs in the UK which have had enough anachronistic moments to more than rival the Ren Faires.
It's a state of mind. It's certainly akin to the various conventions dedicated to various cult tv and movie films. You get it or you don't. What's so wrong about having a bit of fun and dressing up?
Oh, and I'm spending this week dressed in (authentic) 17th century clothing and accusing a man (in doublet, hose and an unconvincing wig) of witchcraft four times a day. Hey, it's part of how folkies like me make a living!