In a word: Image. What twowheel said above is true, but irrelevant for the majority of riders. When I first went m/c shopping, I wrote off sportbikes completely since I didn't want to be associated with the people who rode them. (Primarily. I also hate the riding position.) Cruisers didn't have that problem for me, since that's what the vast majority of people in this part of the country ride. First bike became a Virago 250.
FF a year and a half, and the bike's too small, mostly physically; it was cramping me up after more than about 30 miles. Time to go bike shopping again. By this point I'd been doing a lot more research, reading forums and magazines and visiting dealers and all that, and learning a lot about both bikes and riders. What I discovered is that, for the most part as far as I can tell, serious motorcyclists don't ride cruisers. Why? Same reasons I ditched the Virago. Ridiculous feet-forward position that forces you into a slouch. Heavy, slow steering. Generally sub-par performance on anything but a straight road. 95% of these riders only own their machines to go out on Sunday and ride a few miles with their cruiser friends. If it's nice. The people you see riding weekdays or in less-than-perfect weather? Beat up UJMs, a few intrepid sportbike types, scooters, the odd cruiser. So for most of the cruiser riders, why do they care if their bike is uncomfortable long term or poor performing? It's just a toy-slash-fashion-statement anyway.
I realize there are exceptions re: both bikes and riders, a few of them on this forum. And cruisers do some things well; the Electra-Glide is often a runner-up to the Gold Wing in touring bike comparison tests, though the Vulcan Voyager seems to be closing the gap. But in my opinion, the positives simply don't justify the enormous popularity the segment enjoys in this country. Image may not be everything, but in the motorcycle world it comes distressingly close, and cruisers project an image of which people want to be a part.
And on a somewhat related note, if anyone to which this applies is listening, f*** your loud pipes. Seriously. All they're doing besides drawing attention is pissing off the non-riding public, which outnumbers us drastically and giving ammunition to the people that want to legislate more restrictions on bikes. Same goes for jackassery in traffic. Sorry for the mini-rant. I needed to get that out.
'09 Versys in Blue