Okay, now that I've read it, I'll add this thought too....
"better than" is usually a statement of opinion, not fact. To say the phone is better with root just because of certain features becoming suddenly available is highly subjective: with these features comes risks, and these risks may be such that the people not rooting don't want to take. In this case, nonrooted is better than rooted (FOR THESE PEOPLE, which happen to be in the majority. WAAAAYY in the majority).
For me, root is better, but at the same time, I'm running Haykuro's Hero build, which on my G1, is slower than monkey snot in February since I don't have some super-high-grade microSD card with which to trick the phone into thinking it has more memory, and since the overall build is just heftier than e.g. cupcake. Cupcake ran GREAT on my rooted G1, but the problem was lack of Exchange in the mail app. So, I went to Hero. Having my work e-mail chime in on my hip as it arrives is just a little too sweet to move back to cupcake. Hero's slow for me, but I need that e-mail more than I need speed. I could clock at 528, and often do, but once I open that Music app and run at 528 MHz, my battery dies in a few hours (even without actually playing any music, and even with the phone "asleep"!).
Either way you look at it, it boils down to this: Most of the time, those who would root, do so because they feel in some way held back by... well, whatever you want to call it... "the man"... "the establishment"... "the institution"... Regardless, these people feel like they're being held back.. being prevented from running some application, or from doing something simple that other phones can do, be it Bluetooth filesharing, WiFi tethering, overclocking... and to them, the risk of fouling the phone up is outweighed by the benefit of added functionality.
It's actually a very basic concept in something called Economics that you probably won't get to until high school, but the concept is called a "cost-benefit analysis". Google it if you don't get it, but I think its name is enough that you can figure out what it means...