Status symbol. That, and many people are horrible with their devices. They drop them and scratch them, crack the screen, chip them.
They abuse them and load them with tons of apps. Fill up the phone with videos and photos. The battery holds less of a charge because many people use their phones as computers and will constantly be cycling it dead 3 times a day or more.
Apps update and use more resources and space. They could just clean up their phone, do a reset, and have a case for protection but choose not to and just buy a new one.