Ketchup didn't see enough improvement and ended up with still only 1 flavor.
Spaghetti sauce was something that could sell in many flavors and so they do it.
There is no conundrum. People simply don't want ketchup that isn't ketchup.
And for the record, Grey Poupon may technically be mustard, but it's used differently. If you're making a sandwich, GP is a great flavor. If you're making a hamburger or hotdog, GP doesn't taste right and regular mustard is better.
And finally, can we learn anything from this as developers? I propose this:
Listen to the market. If you can't convince people that your product is better in some way, then it probably isn't.