The thing is, when you are a big, institutional investor (not Joe the average mustachian investing $1000 a month), you need a place to park your cash. A safe place, for a lot of cash. When inflation is not a threat and banks are getting unsafe (you can probably find the list of all banks that failed in the US for the last 5 or 10 years, that's quite frightening, and remember there's no FDIC for institutional investors trying to park $10M of cash), the only safe bet is a country's sovereign debt.
So, when you need to keep your cash, the guarantee to recover 99.9% of your cash is much better than risking (although at a small risk) your cash for a potential 1% yield. Because, if you lose your cash, you go bankrupt too. And losing 0.01% is much better than going bankrupt. Anyway, in many countries, there are laws forcing some institutional investors (insurance companies, pension funds, etc.) to park a given percentage of their money on very safe places.
But I'm not sure lots of individual investors buy those bonds, except maybe a few diehard local PP investors.