I'd say, "говно на палочке" is used for cheap things, which look expensive.
example. great actors play in a movie, but movie is not worth watching
Yes, мороженое is what comes to my mind every time I hear the phrase. Can't imagine сосиски на палочке though.P.S. I'm also curious to know if the expression is based on the practice of selling foods such as сосиски, леденцы, мороженное, и т.д. "на палочках"?