The problem is that you can't always tell when something is failing. A couple of examples from my own personal experience on both the software and hardware side of things...
My bosses have been of the mind for years that you use something til it breaks then you replace it. I've insisted that we take a more proactive stance and regularly replace things, not only to make sure that we have workable hardware but also to make sure we're taking full advantage of all tax breaks available (different things depreciate differently, and after certain periods of accelerated depreciation it doesn't make sense to hold onto old hardware). Long story short, I initially lost that argument and our server died, leaving us out of business for a week. Did we still have things we could do? Sure, but since our business revolves around AutoCAD and producing working drawings on a schedule developed by the architects we work for, this put is in a position to not be able to produce anything that we could actually get paid for. 10 employees at an average of $1000 per day wasted time and our company was essentially out $50,000 of productive work because we didn't spend $3-4k on new servers when we should have. Now we have a firm IT equipment replacement policy in place as a result, but we had to learn the hard way that "use it til it breaks" is not the best way to go and, in the long run, just doesn't make economic sense.
My second anecdote involves AutoCAD again, but in this case we had updated to the latest version of AutoCAD, but we were still using tools, blocks and details developed with a version that was 5 years old because, well, they still worked, right? In the mean time, AutoCAD had developed a wide array of tools and features designed to vastly increase productivity that none of our tools took advantage of because a) no one had kept up on AutoCAD enough to learn all the tricks and b) because we didn't want to invest the time to develop new tools. When a summer intern came in and showed us how cumbersome our old tools were compared to how streamlined and convenient they could be we immediately began updating our libraries. Was it vanity on our part or a need to have the "hottest newness available?" No, it was because we wanted to catch up on all the features and time saving things we'd been missing out on. Is this going to be the same for every piece of software out there? Probably not, but just because you've been doing it the same way for years in no way means you have to continue doing it that way when it may be much more efficient to use the new hotness.
I do agree that updating for updating's sake is not always the best course of action, but sitting on your laurels doing things the same way you've always done them because that's the way they've always been done is also not a very good idea.