System administrators see the virus warning hoaxes as viruses themselves. They consume bandwidth and waste processor cycles. Additionally, the hoaxes consume an incredible amount of mental energy as concerned netizens try to combat them in vain. At the most basic level, the hoax works because people are still quite suspicious of modern technology. Computers have invaded every corner of contemporary America.
People feel pressured to keep up with increasingly complicated business machines.
Many of us are resentful. When a myth comes along that promises to turn our computer into a Lump of Coal we secretly wish it would happen. Recently, a friend of mine warned me of a virus that could give my cat a colonic. Possibly, he wanted to give his computer a colonic. Fear of computers is also the reason for much of the Y2K hype.