For me, I see it in the same vein as other simulation equipment.
A Logitech entry level steering wheel (say g29/g920 or even a lower model) is at a level where people can afford to get into it - they easily sell the most in terms of volume because of cost of entry, marketing, accessibility.
People will take either path of: be happy with it for their budget and keep it, not use it anymore just due to lack of general interest, or use it as a stepping stone to later upgrade to more expensive equipment like a $1000 direct drive wheel bundle because they're enjoying the hobby and want to dig deeper and shave times. Few start off with direct drive equipment as they're new to the hobby but they understand there are more options there. If they enjoy it with entry level equipment, they will research on what else is out there and why it costs more, eventually upgrading. I knew my first sim wheel was entry level and I was perfectly fine with that - it would be stupid to drop $1000 without knowing if I was going to stick to it in the real world. I got years of use from it then appreciated the next level.
Same goes for the people I'm friends with who started with A1Up cabs and now have exclusively full scale machines and pinballs. It got them into the hobby, they upgraded things like buttons and controls. But they knew that the big cabs were at the next level and they eventually transitioned. I'd be hard pressed to believe that almost 1/2 of the demand for joysticks and buttons part sales aren't coming from people with those types of products.
This is my experience with how entry level items have a place. People will know limitations of a starter unit - they will either settle and be happy with it (unless someone wants to pay for an upgrade for them), naturally fad out because it was just filling curiosity, or if they're serious and enjoy repetitive use they will want to take it to the next step with better equipment. I don't think there's a blanket reason why people do or don't go for what we consider the "true" experience - niche and cost for entry is usually the case. I think if you give up on something without looking at what other options are then it wasn't really that deep of a pursuit - a lot of people I know who say they want an arcade machine at home, aren't in it for the long game of arcade ownership, just looking to scratch an itch for a period of time as a novelty.