These have been a thing for a while - check your local Craigslist for "fully loaded" Fire sticks or other streaming TV devices. I wouldn't be surprised at all if you're correct - these devices are marketed to technically unsophisticated users, by vendors who have every incentive to maximize profit.
I've also seen these marketed as "Kodi boxes".
They’re generally not selling a million of these or even tens of thousands of these, so setting up residential proxy software on the boxes would almost certainly not be worth the time spent.