It takes a while before their confidence in the value of the old airplane is shaken. But now it is too late because they already bought the second aircraft. I know of several airplanes that remained on the market for a long, long time because of this same scenario. Another, a Cessna 182, was replaced with a Cessna 210 after undergoing more or less the same treatment. When it didn't sell, he changed the autopilot, refurbished the interior, and raised the price again.
Some folks are in a position where they can do most of the work themselves.
Still, the investment in the equipment itself has to be dealt with. But most people don't want to get that involved with their aircraft. They don't have the time to invest, or the technical expertise. They just want to fly their aircraft, and they want them equipped with the latest and greatest of the available gadgets. But they gag when they look at the price of new aircraft, so they take what they figure is the second best route.