I guess my question is ... an upgrade for who?
I have a Win98 box that has never been connected to the Internet that I keep some of my important records on, It works just fine on the rare occasions I fire it up.
"Upgrades" as they are called seem to be only aimed at more efficiently giving your personal data away...
Depends on what you need it for. I mess around with graphic design on occasion, for which I use one of two graphics editors: GIMP or CorelDRAW. A Win98 system couldn't run those programs, period. For that I need a newer system and, importantly, an OS that can utilize that system. As a simple example, WinXP32 could not access memory addresses greater than about 3.25GB. To access greater memory, one needs an OS that can do so. Also, clock speed matters. Even with the greater amount of memory, the graphics editors I use would be useless if the system they ran on ran at the same clock speeds as the hardware that came with Win98.
Conversely, if all you're doing is using it to store rarely-accessed data, and it never sees the internet - and you never install new programs on it - then the old Win98 machine will do just fine until the hardware itself burns out.
I have an old system that I use as a DIY home server for image files. It's an old Dell that I bought when it came off lease from some big company and has WinXP Pro on it. It's basically just a glorified file server, never accesses the internet, and I haven't installed anything on it since I set up the Apache and MySQL servers on it. So long as the hardware runs, I don't see any need to monkey with it. I have another old Dell that I rescued from the junk room at the apartment building we used to live in, and I have it set to dual boot WinXP and linux (can't remember the flavor right now); that works just fine for me. In fact, one of the things linux is good for is keeping old hardware useful because you can find linux variants that are safe and up-to-date which will work on older hardware the way that an updated version of Windows would not.