The point is to create the incentive to develop the technology or put the current technology on the ground that is only economically viable when fossil fuels are more expensive.
Supply and demand are actually already doing this.
Your are correct that the rapid emissions growth of India and China will negate all reductions of Kyoto.
The theory of course, is that the build-up of greenhouse gasses was caused by industrialized countries and that it would be unfair to penalize developing countries at this point.
I agree that the high price of fossil fuels is the best and most efficient spur to the introduction of alternative fuels. The concern with the sort of over-regulation called for by Kyoto is that it misallocates resources to lousy or dead-end technologies.
Since China has now surpassed the US as the largest producer of greenhouse gases (and on a GDP per capita basis is considerably less efficient) the argument that the developed world caused the build up can no longer be valid.