Paracetamol has two important uses: to lower fever and as a pain killer. It is the most widely used medicine the world over for lowering fever and is quite effective in the usual dose of 500mg in adults and 15 mg/kg for children.
As per evidence-based scientific data, paracetamol should be the first line therapy in disorders like pain relief in osteoarthritis. However the required dose is 1g (two tablets of 500mg each) in adults. Since patients are used to taking 500mg for fever, they tend to take the same dose for pain relief also. Naturally, it does not produce the desired effect.
There are also very strong commercial considerations to push the sale of more profitable, patented pain-killers by the drug industry. Such aggressive marketing leads to overuse of NSAIDs at the cost of paracetamol. Due to lower margins, the manufacturers of paracetamol formulations are unable and/or unwilling to spend money on promotion.