JPIII, Good question and well answered by Steve and waltr. All I can add to their answers is that this great hobby has so many different types of modelers that it is great to have subsets in and around the N, HO, S, and O scales. There is room for everyone. Scratchbuilders, nonconformists, the curious, the ready to run folks that just set up for Christmas, etc.
Specifically for HOn30 or 3 I would say the same reason folks are into N scale, space available. My little bedroom is a good N scale size and a perfect Z scale size. I suppose the perfect HOn fellow would have a smaller space than living room size, an idea that he likes greater detail in the HOn models, MONEY, and certainly a basic nonconformist attitude to not be like everyone else. This is not a bad thing. Ultimately though, he is a fellow with money.
Me? I'm not sure I've mentioned this but even my HO endeavors are tending toward small. I have a regular 40ft boxcar that I never use. All my locos are geared steam and the only mainliner is a 4-4-0. My boxcars are 36 footers. My two new flat cars are 40 ft but look smaller because they are low. My MOW stuff are only about 30 feet. So, by using smaller rolling stock maybe I am a narrow gauger in disguise? A 'want-a-be' if you will. Who knows? I made my stuff smaller to make the small layout seem larger, this I know I did. But, lurking in the background, there is probably a narrow gauger in me? I do have a few bits of On30 after all.
Hardcore modelers? Tough to define. Am I a hardcore or just a better than average modeler? Not sure I can tell what I consider hardcore. Probably too many subsets would have to be used for hardcore. Is an NMRA Master Modeler hardcore or maybe a person that spent 2 hours a week and worked 3 years to finish their project? Who knows? I look with great envy upon folks that can talk and understand electronics in our hobby and I have no clue. So I consider, hardcore tough to define. I don't think you have to be hardcore to be in a narrow gauge subset, maybe just rich. Jim