It seems to me there are two kinds of book buyers.
On the one hand, there are those who want the information contained in a book regardless of the form it takes. The quality of the volume in their hands is of a minimal importance provided the text is accessible. Cost and portability (books still are an inherently portable medium and hardcovers don't exactly fit in a purse) probably figures in here as well.
And on the other hand, there are the hardcover lovers.
Hardcover book buyers are a different breed of person. Some of them are impatient, wanting the newest of the new as it becomes available. Some of them are simply rich and like the way expensive books look on their shelves1.
But some of them recognize a subtle difference between a hardcover and a mass market. Not only are books a portable medium, they are an inherently tactile one. Hardcovers feel different. They smell different. Their pages are heavier and (usually) acid-free, their bindings more solid. Hardcovers are made to last in a way that books with glued bindings aren't.
They're also an investment. Hardcover books, particularly first editions, particularly those with intact dust jackets, slowly appreciate in value after a few years on the shelf. This is partially because hardcovers generally have a more limited print run than their successors and partially because hardcovers tend to withstand the test of time better.
Paperbacks go the other route, slowly deprecating in value as their pages yellow, their bindings crack and warp, their covers begin to fade and (most importantly) more and more of them are printed. To the people who buy books for the love of them as purveyors of information as well as physical objects, a book isn't a book without a cloth binding, a stiff cover and heavy paper.
If it's bound in leather it enters the realm of the religious.
This message brought to you by Booksellers for a Smarter America.
1 Once, at one of the bookstores I've work at over the last few years, a woman came in and spent close to $5,000 on hardcovers. She didn't care one bit what she bought - she had just moved into a new apartment with bookshelves built into the walls and needed 'pretty books' to fill the empty space. I wanted to hit her.