Trading ISK for real money isn't allowed by CCP. You are exactly right that describing an amount of ISK as if it was worth some amount of USD doesn't tell the whole story. It's likely that if the market were truly bidirectional, ISK would be worth less USD than it seems now.
The exchange rate is based around PLEX: an in-game item that can be exchanged for subscription time. People who want to buy in-game currency spend real money for PLEX, and then sell it in the game to other people.
