I'd like to introduce you to an entire field of endeavor called "marketing". Non-industrial diamonds don't provide value, yet people are regularly buying them for ridiculous sums[1].
Diamonds do provide value in non-industrial settings, most commonly as an indicator of a person's appreciation for another person. They are in the same value class as cut flowers, although of course at a different price point.
Lots of people consider feeling good to be valuable. Risk to health is part of the cost that people are willing to pay. Same for alcohol, cigarettes, sugar, skydiving.