Because for millions of listeners OTA radio is not "nearly as good" as other sources, particularly in regards to content. Hence why many choose a paid service over the free radio already in their cars and homes. HD radio suffers from the same issue, poor content and limited station choices (geography), so people are just not interested. Obviously many are willing to spend the $$$ for devices & subscriptions to avoid local radio, so if local HD radio were of any real benefit to the masses the HD capable radios would be selling very well. There is a reason most people are simply not interested in local radio, HD or not.
Sound Quality: Yes, if you listen only to rebroadcasts of AM/FM via the internet you will get very poor audio quality, commonly for three reasons.
1. Such AM/FM rebroadcasts are almost always low bitrate (low audio quality)
2. You are likely listening via your computer's built in speakers which are very small and typically very low quality
3. Just like #2, typical computer sound cards are also low quality with very low end codec processors and poor audio outs
But, when you switch to higher bitrate stations (there are MANY at 192k & 256k & 320k), and you use a dedicated streaming device of good quality (like the SqueezeBox devices mentioned earlier in this thread), the resulting audio quality is spectacular. The point of these devices is to avoid the pitfalls of computer audio.
Reliability: Yes, likely on your end. I stream online stations 24/7 without a hiccup. It just works, assuming you have decent gear (players, router, network, internet).