It goes way back, even before then. And contrary to what some believe and want others to believe, this practice is NOT the company being devious or deceptive, but rather it is a wise and sound business practice that helps keep production costs down, losses at a minimum, profits up AND consumer prices down too.
I was fortunate to tour a Schneider floppy disk factory in Germany way back in the late 1970s. They were making 5 1/4 inch floppies. Back then, floppies were designated as,
SS/SD - single sided/single density
SS/DD - single sided/double density
DS/SD - double sided/single density
DS/DD - double sided/double density
DS/DD was the best you could get. It meant you could write data to both sides of the disk, and pack in twice as much data on each side.
Every disk made was made to be DS/DD. "EVERY" disk! This allows the company to build, tool, and maintain one factory to product one product only - instead of multiple production lines at much higher costs.
However, because we humans are not perfect, and have yet to learn how to manufacture perfection 100% of the time, manufacturing techniques, raw materials and other factors frequently introduce imperfections into the finished product.
So, when a DS/DD floppy came off the production line, it was tested. If it passed double density tests on both sides, it was labeled DS/DD.
But as frequently happened, it failed density tests on one or both sides. So, instead of tossing those floppies into the trash bin as "total losses", they were labeled as single sided or single density as applicable, then packaged and sold at lower costs. The companies still turned profits keeping the prices of the DS/DD floppies down. A very good thing.
So the same practice is applied elsewhere in many industries. Among the IT industries, that includes hard disk platters, memory modules (RAM, flash, SSD, etc.), and processors too.
While the point is valid, not sure "faulty" is the correct word. These devices, when used in the application they are
marketed for, work perfectly and are not faulty.
So from a "manufacturing" viewpoint, they have faults. But from a "marketing" and thus consumer viewpoint, they don't. They perform their tasks as advertised.