If it's a very important program or operating system, then most new products and resources will be designed to fit the newest version of that program. There is also the issue of compatibility. However, anyone using Word for Windows 95 can read files crea ted using Windows 3.1. Most good programs have backwards compatibility, because any programmer worth her salt knows that people will have old materials that they want to keep using. This means that a new version of your favorite program will be able to use the files you created with the older version.
Many upgrades are free or at least cheaper than the original purchase.
For example, as long as you bought System 7.5 for the Macintosh or had it installed on your system, all upgrades are completely free. Furthermore, all shareware and freeware programs have free upgrades upon purchase of the original. And even big commercial programs have lower-priced upgrades. And last, but not least, having the latest versions of software means being at the forefront of technology. I personally like being on the cutting edge which is why I think there are more pros than cons when it comes to upgrading software.