Demos are showing off what the dev or the hardware or both can do. Its 'fun' to challenge yourself to push something to the extreme, and you can produce some gorgeous or cool or neat pieces.
ITs like writing games in the 256-byte or 1k or 4k competitions .. what can you pull off in 4K these days? You'd be surprised .. I've seen 4k demos that leverage a PC GPU and extrapolite full 3d scenes with trains, clouds, rainfall .. unbelievable stuff.
But you don't know until you try..
... in the old days of course, the demo scene was often related to the cracker scene, since overlapping skillsets implied similar people. But modern demos are just demos, fancy showoffs.
jeff