I've never bothered publishing anything, just circumstantially gave a hand several people that have(I don't want my name to pop up in papers for a million and one reasons). I assumed they were since otherwise I saw no logical reason to go for anything other than Arxiv and publish them for free.
Universities, especially in Europe, base hiring and tenure decisions in part on where a researcher's papers are published. A paper published on arxiv has less value to advancing one's career than one published in a journal run by a well-known academic publisher.
This also makes it hard for researchers to organize their own journals, separate from the publishers. Many universities (again, particularly in Europe) use the publishing company as a proxy for the quality of a journal, rather than letting researchers within a field make that determination on their own. Thus researchers are forced to stick with the exploitative publishing companies because universities demand it, despite spending most of their time reading and sharing preprint copies of papers.
People publish in journals (etc) because of the peer review and reputation. People are much more likely to read, trust, cite a paper that’s been through peer review. Also people are more likely to discover the paper by looking in prestigious venues than if it’s just in the arxiv flood. For promotion and tenure, papers aren’t considered unless they’re published and prestigious venues count much more.
