I live in an old farmhouse on some nice land. I've done fairly extensive renovations after obviously no money being put into the house for a good fifty years. And it works for me.
It's also "quirky" in a lot of ways including a basement that still tends to get wet and having one small bathroom and no way to easily add another one. I can imagine a lot of potential buyers saying "Love the location but the house has got to go." (The person I bought the house from actually bought the property for the land. He built a new much larger house on one of the two plots he subdivided from the original property.)
At some point those folks wanted a new house and presumably the cost of what they wanted to remodel was close enough to new that they built news.
The available space that you note can also facilitate just building a new house.