I believe that carbon steel became and remained popular in older knives, and when stainless came along, held its lead in being relatively easy to sharpen to a very keen edge and presumably fairly tough. I generally prefer carbon steel in slip-joints because the stainless alternatives are not usually as good, with the exception of the benefits of rust resistance. The sharpest knives I remember in my youth were the ones with carbon steel blades including a Shrade Old Timer pen knife, I lost, that I intend on replacing
There are a few higher quality stainless knives that bear resemblance to traditional ones. If one considers a Buck 532a mid-lock-backa traditional one, I even own one. It is extremely sharp and has BG-42 steel. Although I got it for a good price, it is not a $15 to $25 dollar knife.
If we were told that Shrade had just obtained such a good price on VG-10, BG-42, or D2 enhanced steel, that they could make Old Timers in them for just a few dollars more, you might convince some that they could do without carbon steel, as these steels hold a great edge. Unfortunately, the manufacturing/tooling costs would remain high for these materials and so this seems implausible. Even then, there are those who still prefer a tool steel blade, in high dollar folders, for added toughness...unless CPM 3-V comes out in a tough stainless.
In sum, it appears that one is going to be able to obtain a better quality, sharper, inexpensive knife, in carbon steel.