Back when it was popular it was one of the early players which supported a lot of different formats, as well as early radio streaming. Competitors either cost money, wanted you to install IE toolbars, or simply didn't have the features Winamp had. It could be expanded with loads of different plugins (games, visualizers, EQs and other dynamic effects, ++), and could even be used to broadcast streams with the proper plugins IIRC.

For my part, having an updated version of Winamp would be great. I've got a big music library sitting around, never really became friends with foobar, and Plex and Apple Music struggles with some of the formats I've got.