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Occam's razor answer: They're crackpots that seek out and/or surround themselves with other crackpots. One crackpot makes the stuff up, the others eat it up. Eventually it becomes a positive feedback loop of crackpot theory feeding more crackpot theories.
Did I mention they're crackpots? Because they're crackpots.
It can be worse than that sometimes. The crackpots see some nuggets of truth, and for whatever reason, they make some leap in interpreting them that leads them to nonsense. They keep finding things that are either true, and add them to their worldview, or made by people who took compatible leaps of logic away from reality. They propagate it to others.
Taking Kennedy's assassination as a classic example: it's true that a lot of people wanted him dead, some benefited from his death, the CIA has a history of assassinations, and Lee Harvey Oswald was a communist who had once lived in Minsk. I can see why someone with just enough information to feel confident can arrive at a belief that the CIA or USSR killed Kennedy, while missing critical information to realize there's no reason to believe either is true.
There's an episode of Voyager where Seven of Nine goes down conspiracy rabbit holes that's a lot like that.
Basically, the first one turns out to be correct (although very minor), but it fuels more and more absurd theories. Essentially she goes into a feedback loop, over- and mis-analyzing everything until she's convinced that every encounter she's had with anyone has been part of a conspiracy against her.
So maybe "crackpot" was a bit harsh, at least in some cases.
Yeah that sounds like a realistic, if a bit hyperbolic, portrayal of at least some people's experiences.
I haven't personally been in any conspiracy theory rabbit holes, but I've seen a few people slide into them. There are some people who are so far out there they generate much of the nonsense, but I think there are a lot more victims than crackpots. And I think most of them have a nugget of truth or legitimate grievance in there somewhere.
Lazerpig called it a Woozle Hunt, after the Winnie the Pooh story. Pooh and Piglet think they're hunting a woozle, but in reality they're just following their own tracks around and around.
I'll have to remember that. It's much more well put than how I described it.
MK Ultra
For every real one that is eventually discovered, there's 10,000 flying around in real time that are total bunk.
Whether the 10,000 bunk ones are deliberately put out as decoys to hide the 1 real one, I will leave that up to the reader.
All I'm saying is the first attempt on MLK's life came from a schizophrenic black woman during the height of MKUltra's operations while she babbled about things the CIA hates and their favorite test subjects were disenfranchised schizophrenics.
This is the important difference between conspiracies and conspiracy theories. Once there's actual evidence, it's no longer a conspiracy theory.
For example, the fact MK Ultra was real does not prove the fact we are ruled by lizards.
Evidence existing is a very low bar, It's when it's proved beyond reasonable doubt that it stops being a theory.
“I prefer to think of it as more of a conspiracy hypothesis, really”
In a scientific setting that would be the correct term. A theory is not synonymous to a guess, but rather a well-substantiated explanation of fact.