Ultrasonic water diffusers were originally developed as foggers or misting fountains that simply convert water into mist or vapor and had nothing to do with essential oil. Many of these units were sold because they were neat and attractive.
Then it was discovered that adding a few drops of essential oil to the water would make it smell nice. It was marketed as an essential oil diffuser and over time consumers had come to believe that this was true oil diffusion. The actual results show China filled a niche new market niche through the EO industry. Unfortunately, they do not perform as advertised.
It must have been a huge breakthrough in marketing campaigns, because the idea exploded into a multitude of products directed to the Essential Oil and Aromatherapy industries. Ultrasonics became a commodity because it was cheap and had no regulation. At first the units were good quality, worked well and may have had price points in the $100 range.
As the demand increased, China was developing cheap, low quality knockoffs to be sold dirt cheap. This kicked off the Race to the Bottom to get the lowest cost diffuser by cutting down the quality as much as possible.