It's not an entirely rational phenomenon. To a degree the queue is driven by the fact that there's a queue: because it's so hard to get Lim Chee Guan's bak kwa, it's desirable, which increases the queue length, which makes it harder to get, which makes it more desirable. And because the freshly made stuff doesn't last very long, and Chinese New Year is an inflexible deadline, the peak demand is insane.

That said, if I was the one running LCG, I'd reduce demand and increase my profits by the simple expedient of quadrupling the prices