Presumably most domain owners have some technical savvy, no? I have gotten dozens of those letters and they went right in the shredder.
And how many times do you think someone in a management position finds it lands on their desk and then, thinking it's a valid bill simply sends it on down to accounts for payment. Even if the folk doing the registration are typically tech savvy, that doesn't mean it will be a tech savvy person that receives the 'renewal notice'.
Then there are those that set up a website from one of the many one-click web presence builders. Folks like builders and plumbers who again may not be tech savvy. Perhaps their partner simply pays the bills as they come in, or they do it themselves in the evening. Never having owned a domain before, they see no reason to believe this isn't legit, so off goes the check.