Many reasons:

• Unawareness of, or indifference to, DVDs’ subpar video/audio quality.
• For most people, DVDs “just work”, unlike Blu-rays which require a lot of setup compared to DVD.
• Studios and manufacturers did a poor job of educating the public about the different formats.
• Streaming/digital is too convenient for the public to consider physical media.
• People are unable/unwilling to upgrade their tech.
• DVDs are cheaper and more ubiquitous than Blu-rays and 4K UHD discs.