So I found this article by Dikky Sinn for the AP on the AquaDots to be quite illuminating. A reporter who actually made some phone calls and dug in to pricing on the respective chemicals to shine some light on why these things happen.

A company spokeswoman for Moose Enterprises' Hong Kong office said the production of the toy was outsourced to a mainland Chinese factory. She refused to elaborate and referred all further requests for comment to the company's head office in Australia.

''Our Hong Kong office is only responsible for operations such as logistics and shipping arrangements, we don't have any firsthand information,'' the employee, who would only give her surname, Lo, told The Associated Press.

It surprised me a bit the first time that I read the product was made in Hong Kong, since most of these items are made in Shenzhen with the Hong Kong office handling sales and logistics. (The rather paltry division of labour between Hong Kong and the mainland is a topic of a post for another time.)

But further down comes the real kicker.

The toys were supposed to use 1,5-pentanediol, a nontoxic compound found in glue, but instead contained the harmful 1,4-butanediol, which is widely used in cleaners and plastics.

...

It's not clear why 1,4-butanediol was substituted. However, there is a significant difference in price between the two chemicals. The Chinese online trading platform ChemNet China lists the price of 1,4 butanediol at between about $1,350-$2,800 per metric ton, while the price for 1,5-pentanediol is about $9,700 per metric ton.

Understand? Companies outsource to China to get cheaper production costs. And the offices in the US and EU are constantly leaning on sales agents in HK and the mainland to come up with low low prices. Guess what that means? Low low quality with lots of cut corners. And with a little forged paperwork and a lot of levels of suppliers looking for and providing plausible deniability, the low low quality can become a threat to health, especially when the end users' government is committed to gutting government consumer safety protections.