I live in Silicon Valley and this is a standard thing here. Companies measure your success as an employee based on "impact". Launching a new thing that tens or hundreds of millions of people like and use is big impact. Deleting old code to reduce the overall complexity of the system is also seen as having a lot of impact - old code has potential security risks, privacy / data storage risks, may require legacy frameworks that aren't supported any more, etc.

However, maintaining an existing system isn't always seen as impactful, unless it's a major system or needs some large bug fixes for issues that affect a significant number of users, or that affect paid customers.

Sometimes, apps are built by a small team (say 1-4 people) during a hackathon. Eventually, that team has to move on to other work, and nobody else wants to pick up maintenance of the system they built. This is usually the reason why smaller products die.

You also need to keep in mind that if you're using a free service, you're not the customer. The customer is whoever is paying for the service on your behalf - for example, advertisers, paid users, etc. Generally, time spent improving the app will be spent on improving the experience for paid users rather than free ones. New features in systems like Gmail, Google Drive, etc mostly get built because paid users ask for them. This also means that apps that don't drive revenue (like Google Reader, etc) have very light staffing.