It depends really. People buy both today, otherwise they wouldn't still make DVDs for 4 episodes.
Some, like @The History Kid said, buy it for the aesthetics, though that isn't always the case either. For instance, my Tenchi VHS were very artful, though my Banner of the Stars individual DVDs (back then there was no complete collection option) had no artsy design when combined (albeit the coverart more than made up for it). Then, you look at Space Brothers and each season's complete collection combines to form a well planned image. I remember the FMA dvds had sn image when combined, though I gave mine away to a friend a long time ago. It all really depends on how much love and effort a company puts into the coverart.
I personally prefer boxsets as they minimize the use of space for storage. I currently use two giant DVD caninents with sliding glass doors to store my anime collection in and that is an expensive investment to make. I tend to buy individual DVDs for anime that don't offer a boxset or are out of print with limited availability. Beggars can't be choosers after all.