Google pushing out a new letter each year is working wonders even if the hardware does not degrade at all. People remember how a major update years ago did make things noticeably better and won't easily give up hope that the current increments would be similar (same thing for hardware btw, people remember the huge progress between the very first generations of smartphones and want to repeat that experience, no matter how futile the attempt might be).
Internet lore suggests that the majority of users does not care at all for Android versions, but I don't think that this is true: median users do care, just not as much as the vocal group that mistakes the lower level for not caring at all.
I wonder if google even wants to continue the yearly update circus or if they feel pressure from manufacturers to keep that wheel rolling.
It might be too subtle for you to see but there's real advancement going on in those new releases. Some of those features are security-related, which is the same kind of thing that drives many iOS features. IMO Google does good by releasing new updates to Android and for their branded devices they usually offer one or more of these updates before they stop supporting them. If you choose to root the devices, often the community will support the new Android releases with their ROMs.
Security might be served much better with a more "LTS" Android that would give hardware companies less excuses to leave devices behind. Not only less excuses, but also less incentive to do so: "no more boring security updates" is a much weaker carrot to lure users to new devices than "no more exciting new sugary snacks", which usually also implies no more security updates anyways.
Internet lore suggests that the majority of users does not care at all for Android versions, but I don't think that this is true: median users do care, just not as much as the vocal group that mistakes the lower level for not caring at all.
I wonder if google even wants to continue the yearly update circus or if they feel pressure from manufacturers to keep that wheel rolling.