In my experience, such toy guitars are not good as real instruments. Making a real instrument takes a lot of precision, for example you have to make sure the notes sound right when they're played up the neck and the instrument is in tune. Good intonation depends on many things like the placement of the frets and the placement and height of the saddle.
Intonation on toys is unprecise and crappy. You can tune it but it'll still won't sound good when you play chords, especially up the neck. In other words, it's a toy and not a proper instrument. That's why they're so cheap.
edit :
That doesn't mean you can't play these, though. I bought one myself once and I could play on it .. It just sounded ****ty
For the money you pay, maybe that's a good deal.