...Do people really fall for this kind of con game, I can't believe that people are that dim witted...
It's not that we are dim-witted. Social interactions and a whole set of assumptions are built into our behaviour. We are social animals, and our default way of working is to follow a set of habits. Most of the time these work, but scam artists are skilled at using these automatic responses to their advantage.
People who spout the cliche 'You shouldn't make assumptions' completely misunderstand how brains work. Our entire lives are sets of 'assumptions' - if you didn't make them you couldn't get up in the morning...
I don't think the best way of addressing this sort of issue is to treat every interaction with another human suspiciously, as is sometimes suggested. You just can't keep living like that. I think the best approach is to educate yourself about the common types of scam, so you fold 'appropriate' suspicion into your general habits. Googling 'Internet Scam' will easily give you a whole set of data about what to look out for. Consequently, I tend to think "I can't believe people are that badly informed...".
Unfortunately, they are...