I've taken my (real, not knockoff) Uggs to the playa for 6 years now. They're holding up fine! I wash them when I get home, and then condition them with Ugg Conditioner and a special Ugg brush.
Sure, they're faded, but they were a light pink to start with, so now they're just lighter playa-pink.
They're FABULOUS out there. I wear them some nights when I won't be running around too much, for those middle-of-the-night potty runs, and also in the early-am when I'm having breakfast.