I think the reasons for it being still available have been succinctly stated in the demand case, but as an owner of a few dozen 127 cameras, I can say why this format is one I have a soft spot for:
It’s the variety of the format that pulls me in. From a single film stock one can shoot three distinct aspect ratios in a wide range of cameras.
The 4x6.5 format has a pioneering SLR, absolutely tiny folders, box cameras, and one of my quirky favorites in the focusing Zenith Comet collapsible, among other fun options.
The 4x4 format has a neat mix of toy and box cameras, a huge American Rangefinder in the Revere Eye-Matic, a square SLR in the previously mentioned Komaflex, and few odd focusing models from Belora, Ferrania, and Kodak of England.
And the 4x3 “half frame” format has even more from other toy and giveaway cameras, as well as a few more super small folders like the Zeiss 518 and Zeh Goldi.
And for the wildcard, two of the 129 film format cameras I have snapped up have had later conversions to use 127 film.
I know of no other format with the variety seen in the 127 format.