Some reasons:

• prioritized traffic - if towers are congested, carrier customers get priority over prepaid customers
• name brand recognition - most have heard of Verizon, T-Mobile, or AT&T, few have heard of Tell, Ting, or RedPocket
• financing - you can get "free" upgrades from bigger carriers, whereas I pay cash w/ my prepaid service
• features - most big carriers support roaming (sometimes international roaming), whereas those tend to be ala carte w/ prepaid

In short, you get a bit more hassle w/ prepaid, but you get a lot of savings. I pay <$10/month for my service (1GB data, unlimited text, 300 minutes call), and I could get unlimited everything for $25-30 (depending on prepaid carrier). I bought my phone for <$400, whereas cost is less of a concern for big carriers since they often offer financing issues. I hate monthly payments, so I prefer to buy devices in cash and keep my monthly service payments low.