"Whats the deal with Thai Karaoke bars"
You didn't go to a Thai Karaoke bar, you went to a Japanese style Karaoke bar.
Thai style karaoke bars are usually very cheap, loads of them around the ring roads, lots of Xmas lights around the outsides. Many attractive Laos ladies inside. Been to a few with pals, cheap beer, cheap food. You put 100bht in 10bht coins in a glass in the centre of your table, every time a girl sitting at your table sings a song, she takes 10bht out.