Rags...I went through Macy's department store and was amazed to see how many different styles of jeans for women that have the knees already shredded. They aren't cheap either!
Personally, I wear clothes until they are torn... like the ones in my report of the high-efficiency (HE) washing machine that prematurely wears out jeans. I've got a few with the crotch wearing through, but that wasn't from the washing machine.
Side note: I knew a college girl who knew which side of the zipper a guy hung his junk on from the worn spot on his jeans. I'm sure her research was more than their appearance.
There are YouTube videos describing how to take new clothing and cut holes in them with back stitching to keep the shredded look exactly the way you want.
I doubt this fad is going to end anytime soon...