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It has a nice atmosphere, good rewards, and there is a mix of activities and afk. The event does a good job of seeming like, well, an event. Something going on in the world to be excited about. I would say that is why people like it.
Gambler's fallacy I suppose. If you suppose at the beginning you have 30 attempts at 50%, then you can calculate that your odds of never succeeding are near impossible. But once you attempt lets say 10 times, all fails, your odds of the 11th roll are still 50%. With enough samples (attempts) the numbers will eventually average out (the law of large numbers), but there is no force that causes the results to average out sooner rather than later. Possibly much later. Like, I bet a lot of people blow up step 6 special upgrades by thinking "I failed the last time, 45% is almost 1 in 2... so this second one should probably succeed! But it's still 45. It'll still roll whatever it feels like.
I'm sure if DevCat fixed the ridiculous RNG Loot tables for Dungeons so players actually get good rewards for their hard work, the game will do fine for many more years.
WooWee! That sure was a grueling half hour dungeon run (ignoring the time it took to even get an advanced pass)! Take this gathering knife!!