HTML 3.2 was created as a very very meager attempt to get the browser vendors to standardize (and there are no innocent parties in that fight). It wasn't even so much a "lets agree to this" as a "lets document almost every hack out there".
HTML 4.0(1) was an attempt to standardize the language much more, and move presentational things into CSS. However since everyone on god's green earth used the "transitional" doctype instead of the "strict" it is barely any different than 3.2.
XHTML is the W3C's first real attempt to stop just making a middle-ground agreement, and genuinley think things through on what makes the most sense, whats the most consistant, whats the most parseable, etc
So basically using anything pre-xhtml 1.0 is really just being an 'enabler' to the whole fast-and-loose attitude browser makers have had with standards. Some will bring up the whole "oh well the older ones are standards too" but as I explaned above those were more compromise than computer science.
I'm not a complete wacko about it though, there are some legitimate not-alientating-even-4% business reasons for not having a page that validates completely. Actually its pretty easy to validate, whats hard is not using table-based layouts.
ignorance, laziness, and an "i'm to cool for this xml buzzword stuff" attitude are the only reason's i've ever seen anyone not adopt an xhtml preference.