I think the appeal of NYC is the cost and luxury of vacationing there. Even the skyline views - they're nice but I don't think they hold up to mountains. However, I grew up extremely rural so I am biased towards what I know and people like what they like.
I don't think anyone goes on vacation in cities explicitly because they are more expensive - the appeal is that there's a lot of fun things you can do in cities.
A large part of tourism is being able to brag about where you went. The cost is just a side effect. You can see this more clearly in the hierarchy of non-urban tourist destinations.
Cities like NYC and Paris have high baseline cost of doing business there. If the stuff that did cater to tourists didn't also have broad mass market appeal or other usefulness at those high price points (e.g. a hotel can serve business travelers as well) it would be priced out replaced with other stuff
