I always used HBS because it had a sheath and longsword for the longest time didn't. It also looks cooler with heirloom mod. I don't know about the trade demands but even before the patch I was seeing a lot more people with +3 HBS than there were 3-4 months ago. People are just catching on to its sexiness.
1 speed is "much more" fast?? +1 cut and +1 length with one less speed is superior in every way when it comes down to it.
Heavier weight, less upkeep, and 1 more speed. 1 less cut and 1 less length is, contrary to what you say, not as big of a deal as you seem to make it out to be. The HBS also gets style points for having a sheath for its entire lifetime, and just having a better texture + model in general. Lastly, Longswords were, and still are very common, so there's a certain originality factor with the HBS.