Sometimes the aspect ratio of a movie or television show doesn't match the aspect ratio of the television or viewing device. The solution to this is either letterboxing or cropping (pan and scan).
One justification for pan and scan instead of letterboxing is because VHS tapes have low resolution and letterboxing would exacerbate the problem. However there have not been any major VHS releases in a long time and in addition lots of people now have a high definition or even an ultra high definition (4K) TV or monitor rendering this justification irrelevant.
In addition all televisions and DTV converter boxes I used have the option to zoom into the video for people who don't like letterboxing.
Also sometimes someone must review each scene and best decide how to crop it which means that pan and scan has a higher cost associated with it than letterboxing. This does not apply when center cropping the entire program.
Another thing often times pan and scan releases anger fans of whatever was cropped which could result in a loss of revenue.
Also unless the program was intentionally framed for multiple aspect ratios, it's not what the people working on it intended meaning that important things may get removed from the program.
As a specific example of this. Seinfeld has been cropped to fill a 16:9 frame. The result of this is that everything looks zoomed in too much. It almost feels like I'm invading their personal space. In my opinion watching cropped Seinfeld is a terrible experience. Something "feels" wrong when I'm watching this. Of course this is only my own personal opinion. Maybe lots of people prefer the other way around but I've only been able to find people against cropping Seinfeld and when I research if people prefer or don't like pan and scan I find largely negative sentiment associated with pan and scan instead of letterboxing. There seem to be many people who have a very strong opinion in favor of letterboxing over pan and scan.
With all that said why are we still seeing pan and scan releases today?