As I remember it most A500 owners (myself included) were unwilling to upgrade because:
1. The majority of games were poorly coded and would only run on bog standard A500/A1000/A2000.
2. High end/expanded Amiga's still had very poor printer output compared to the PC.
3. High end Amiga's cost an arm and a leg - but still lagged behind the PC in most (all?) business applications.
4.Expansions and peripherals also cost an arm and a leg. Since only ray tracing software and the like could take real advantage of the added harware it seemed like a lot of wasted money to the average user.
5. PC's were becoming much cheaper, powerful and better supported.
However, none of this actually stopped me from upgrading to an A1200 with, 256Mb HD, M-Tech 1230, 8Mb ram, etc, etc.