Much like courier bags and fixies, plenty of idiots have them but also plenty of normal and perfectly nice people have them too, just for their own amusement. Doctoring to look like a totally different letter is definitely a bit off though.
I think quite a lot of personalised plates are just there because they like to make their car their own – much like any other form of personalisation – people making custom decals for their frame? People choosing certain componentry in certain colours they like? Could claim any of these things are equally wankerish.
I'd quite like my initials on my plate, not because I want everyoen to know they're my initials, or because I'd like people to know I had a personalised plate, just because it would make me smile. What's so wrong with that?