I agree with you, that at the end of the day cost is the overriding factor & if it is cheaper to upgrade hardware than to rewrite software, then that's the way to go.

But I feel that many people are being pushed into upgrading hardware because it is easier for the software companies. For larger companies, it is often not a problem to cover the costs of hardware upgrades. Quite a lot of the people I come into contact with are individuals, schools, small companies & small charities - having to upgrade the hardware to run the latest software is often an unacceptable cost.