They still exist because their clientele still exist. That’s the way the free market works. If they had no clients they would go out of business and cease to exist. So the real question you’re asking is why does the clientele still exist? And for this I can think of a few reasons.
1. Adult video stores sell much more than adult videos. This has been covered here already so I won’t go into details, but yes, toys, lube, costumes, and all sorts of other things they sell fill a niche.
2. Some people love collecting physical DVDs. Some people collect porn just like one would collect Quentin Tarantino movies. Some people prefer to watch DVDs on their screen, sitting on a comfortable couch, versus watching it on their computer screens. Some couples even watch porn together, and it’s much more spontaneous and rewarding to do so on a couch versus crammed around a monitor.
3. To support the producers of the porn. Porn producers aren’t going to keep making nice pornos if no one buys them and chooses to torrent them instead.
4. There is a drastic difference in quality between what one finds on YouPorn and what a porn production company can put out. There is also a difference in variety and availability. Sometimes this works in the favour of internet porn, such as with the extreme fetishes, but even those guys don’t offer their works for free, you have to pay a subscription fee. It’s just an adult video store without the physical store part.
5. There will always be a subset of the population who are computer illiterate. And even amongst the computer literate, there is only a small fraction of users who possess the skills to set up a BitTorrent program and find torrents. As simple as we think this task is, to some people it is an insurmountable problem.