Partly b/c before 7z and other better formats were available, .RAR was out compressing .ZIP, and allowed for easy recovery to be included when making multiple-part sets. The other part is that a lot of people are set in their ways, or else have paid for a product that they now like to use.
Back in 2001, for example (when *I* bought WinRAR), .RAR was 10 times better than .ZIP, 7Z wasn't around, and LZH was dying out in the world of Windows....
Oh, and I am still able to use my license file from 2001, legally, as verified by RarLabs sales dept. last year. In addition, I can use it on my *nix boxes with the *nix versions of .RAR / unrar As long as I am not trying to use them simultaneously on multiple boxes.
Having to buy a new version of WinZIP every time it came out got old fast. Now that FOSS programs are out like 7-ZIP with native 64bit support, it is still a tough choice, b/c making, testing, and extracting .RARs in Windows is a piece of cake, and the multiple-part file sets makes it a very attractive alternative to using .ZIP / .Z
I will say, however, that I always install 7-Zip as well, as it has come a long way from its origins as well, and is every bit a robust archiving client as WinRAR....