Actually, just thinking we had dolls on our dementia unit, and some of the residents seemed to find them quite comforting. Although i don't think there's a need for them to be quite so realistic.
There was a documentary (C4 of course) a few years ago about these dolls and the women who buy them. Most of them treated them like human babies...the program seemed to alternate between revulsion,creepiness,and sympathy for those desperate enough to own such an object.
Obviously there is a big market for them.