Almost anything worth seeing (and not too difficult to get to) is bound to become a tourist magnet.
It's not like it isn't a working market. It's not a staged performance for an audience - just a market that has grown organically, with its origins as a purely local market, but one which evolved to a point where selling things to visitors became more profitable than selling everyday staples to local residents, causing those more profitable traders to displace the purely local ones in the high-traffic, desirable centre of the market. The visitors are mostly Thai rather than foreign - floating markets are as far removed from the everyday experience of Bangkok urbanites as they are from those living in first-world countries.
This isn't restricted to low- or middle-income countries either. Tsukiji Fish Market, various European Christmas markets, Oktoberfest, etc., not to mention historic town centres everywhere - they've all outgrown their original, purely local purpose to become national or international attractions, where the original purpose has almost become secondary to their status as attractions.
I'd draw the line at anything set up purely to cater for visitors - reconstructed districts which are basically real-life movie set, with no function other than to cater to tourists, historical re-enactments, 'pay-me-to-take-photos' people in costume and similar. But places and events not originally set up as tourist attractions, which have nevertheless evolved in to them over time (with the original purpose being relevant to a greater or lesser degree) are a much greyer area.
This raises another question. When a location or event evolves in this way, what is the actual attraction? Is it the original purpose - the local festival or market - that's the attraction, or is the real attraction the international spectacle it has become? Certainly, were they to remain purely local events or locations, many things would never attain the scale, diversity or accessibility to make them interesting to outsiders. No-one wants to go out of their way to see groups of local kids have a tomato-fight. Conversely, once something has evolved into a regional, national or international attraction, how relevant is its original purpose? Visually and photographically they're often one and the same - at least from a big-picture perspective. It's only when you zoom into individual stores and see too many which are selling trinkets or snacks, or when you focus on the crowd and see a large proportion of out-of-town visitors, that you realise the original purpose has been subsumed into something else. And, of course, the atmosphere is completely different, but this rarely shows up in larger-scale photographs.