I want a computer in my kitchen breakfast nook. This is a space where I entertain guests - a rat's nest of cables and a large desk are completely inappropriate for that venue. This is a location where I'm willing to pay a premium for aesthetics.

My man-cave basement machine is a proper desktop gaming rig.

They're very space-efficient and don't create a mess of cords. "Underpowered" is relative to need, and a lot of people don't need all the power in a modern computer.

Not for myself,but for my mother. She has a tiny tiny desk and she HATES cables, so I suggested an All-in-one would actually be a nice device for her, and she really likes the idea. I wouldn't buy one ever,but I am not the target demographic.