It's because digital payment methods are almost completely owned by private entities here that charge fees for processing. Checks don't incur those costs, so people stick with them.
We (76 and 60) shop with our plastic (credit, never debit). Next cash if it is hand-to-hand, or we can get a receipt. Otherwise check, but we don't carry a checkbook. I may do PayPal, Venmo, or Zelle, but only if I know you personally -- if you're dealing with my spouse, you'd better take a check or plastic or wait for me.
to the detriment of literally everyone else.
How so? It's an option. The other option may be "no sale." We grew up on these and we understand them. All the high-tech ways are ever-changing, and we're never sure where we stand with them.