Why are BMX saddles so low?
Low seats provide clearance for more acrobatic body movements. This is essential for bunny hops and nearly every other trick which builds off of this skill. If you look at trials bikes they similarly have lots of clearance for the rider over the frame and the saddle. Since speeds are relatively low, and long distance riding is not the goal, pedaling efficiencies gained by a higher seat position are much less of a priority than vertical maneuverability. 

As per Daniel R Hick's comment BMX bikes are also commonly used for children's bike's as they are easy to learn on because of the low seat. 

In this case fashion follows function. Just because the particular riders you see aren't tricking doesn't mean there isn't a valid functional reason for this kind of setup.