I think we're on different pages here. You seem to be taking exception w/ Doug, believing that he takes negative-amortization mortgagors as speculators or dupes of a wicked finance industry. I'm inclined to agree with him, but I'm trying to get at something a bit broader.
The point I'm making is that it makes eminent sense for banks to come up w/ these products and for consumers to buy them in certain instances (so long as interest yields are low, the yield curve is robust and housing prices are rising). The problem here is that those instances are unlikely to obtain forever, and that it's unlikely that any lender is going to want to refinance a negative-amortization w/ a 30-year arrangement in the face of dwindling or negative equity.
I really don't care whether these products benefit or harm individual mortgagors or lenders. The fact is that they're exploding: a recent trade journal said that the "percentage of non-agency short-reset ARMs - mainly negative-amortization products - increased in November to roughly 22% of total prime production from about 3% in April." With the number of these things multiplying they begin to pose a systemic risk if things deflate and users are unable to leverage their wildly overvalued properties.
At the individual level it may be speculative as Doug says, beneficial as you say, or any number of other things unsaid. What I say is that in the aggregate it's riskier than more traditional financing and that if there's a derailment a lot of us bystanders will get taken out.
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