The second reason why most of the TV programming that's watched on HDTV sets is still standard def is because HDTV programming isn't nearly as popular as HDTV sets. The evidence for this includes the fact that there are only about half as many households with subscriptions to HDTV programming packages as there are households with HDTV sets. There are several reasons for this. For one thing, HDTV has become something of a status symbol and the HDTV sets are much more evident of this status than having the HDTV programming to watch on them is. Another reason is that HDTV sets have the wide screen aspect ratio that many DVD's and an increasingly large number of standard definition TV shows are available in. The wider viewing area is a good way to heighten enjoyment of watching TV, and in many ways is more noticeable than the high resolution picture that you get with HDTV. Yet another reason is that modern video game systems like the Xbox 360 and Sony's Play Station 3 can display their graphics in high def resolutions and take advantage of the 16:9 aspect ratio of HDTV sets.
Despite all of this, many people find standard definition programming relatively unsatisfying on HDTV sets. There are several reasons for this. For one thing, the analog format that a lot of standard definition TV still comes in, isn't completely compatible with a lot of HDTV sets. This causes a worse picture in many ways than if the same programming was just displayed on a standard def screen. Another problem comes from the fact that HDTV screens are simply designed to display more pixels which result in a more detailed picture than you can get from a standard definition TV set or standard def programming. Therefore, the result of displaying standard def programming on such a high def screen is missing pixels which cause the picture to look grainy and generally low quality. This is especially obvious when standard def programming is displayed on a relatively large high def screen.
There is a way to combat this problem though- buy an HDTV set that's good at rendering standard def programming. There are a variety of sets that are better than average at doing this and they're made in a variety of technologies. DLP projection TV's and Plasma screen TV's can both be good at this, but there are more LCD screen HDTV sets on the market that are well rated for displaying standard def programming than any other type on the market. One thing that will help is getting an HDTV set with a built in up converter that will fill in the absent pixels to make the SD picture look sharper. Barring that, a smaller screen will look better because the gaps in the picture will be harder to see.
In all, this is a problem, but not one that can't be avoided with a little bit of foresight.