For the most part, the people currently using windows 98 bought it preinstalled. Bought the applications they need, and are happy with that. Their next upgrade will occur when their current machine dies.
Several of my older friends will talk about upgrading to XP every once in a while, but never do, they do not want to buy an office suit, a card maker, genealogy programs etc all over again.
I have an Aunt, who is still happy using WFW 3.11, it runs her applications. The machine does all she needs.