Maybe older versions of Windows were easier to pirate or more widely pirated, and people avoid upgrading in case they run afoul of anti-piracy measures.

Actually, Windows 7 is significantly easier† to pirate and still get updates than XP and involves far less risk. I won't provide links here, but you can download the ISOs directly from Digital River, guaranteeing that no extra code has snuck its way in and the image is untouched (something that is not the case with most copies on Bittorrent websites, for example).

† If you are a geek, that is - you do have to modify the bootloader or your BIOS, but unlike cracks and other activation work-arounds, it keeps working.