Sure, status is a factor. But for people who do a lot of driving, having a nice car really benefits their quality of life. No one wants to spend hours every day in a miserable little penalty box.
I can't speak for every car. I test drove a Civic and did not find it comfortable (way back in ~2007) and that was mostly due to my own dimensions, but I found the 2007/2008 Honda Fit seats great, as well as the 2014 Mazda 3 I had owned.
As comfortable as an $80K car? In some cases, no, but often more comfortable than the luxury cars of a few decades ago. Hardly a penalty box!
Cars must be the textbook case of Stockholm syndrome. People keep buying Audi/BMW/Mercedes and European cars in general for god knows what reason (even though when they inevitably need service, it is always an expensive nightmare, among other big problems), they buy stuff that is functionally useless and stupid looking like CUVs (many of which which have less interior room than a Camry, burn more fuel and still ride and drive like ass), and have caused the market for full size body on frame trucks to turn completely on its head (hard to find anything other than pavement queen king ranch doodoo trucks that will cost you at least your first born son). This whole "it's shit if I don't pay a huge premium, and it's shit if it's not huge and loaded to the gills with useless shit you're never actually going to miss or use but will cost a small country's GDP to even flash to pair up when you need to R&R" is something that's probably one of life's great mysteries to me.