I typically don't buy games with torn labels- worn ones, sure, if the price is right & the game isn't easy to find. I do have some torn labels from earlier in my collecting days, and I don't feel particularly compelled to replace them. It's the kind of thing that I'd prefer to avoid, but not so bothered by that I won't keep a game I already have that's messed up.
As for the why, there's a lot of reasons- the biggest one being little kids are unpredictable weirdoes. I once pulled French fries out of a PS2 placed there by a two year old, it's not so hard to think they'd mess with a sticker too. The same family also had a six-year old who'd ripped apart a PS2 case by mistake, becuase he'd never opened a DVD case before & he thought the clear plastic that held the art in place was an additional layer of cellophane to remove. I could see a kid making the same mistake with a cartridge, thinking the sticker is hiding the 'game'. Plus, you can never underestimate the power of people to completely mistreat their stuff. It's quite impressive sometimes!
