We know they stink, but it's what a lot of people have spent time working with.

There is no straightforward migration path from vdproj to WiX, either. It's a case of re-writing all of your deployment code (which has already been tested/tweaked/hacked on for years) for no upfront benefit.

It's pretty simple. We used this and it took about an hour on top to adjust our build system to label the packages properly:

http://www.add-in-express.com/vdproj-wix-converter/index.php

WiX is missing all the ease-of-use features it needs to be a non-agonizing process. Deprecating installer packages in favour of WiX would make sense if they provided a migration path and better tooling for WiX.

I've been out of the Windows deployment ecosystem for ages. What's the benefit of using WiX over nsis?

You get Windows Installer packages, so you can deploy applications via group policies, you get other niceties, like pretending an application is installed until it's actually used (and install then), you get proper transaction support during the installation (something I've seen very many NSIS installers get wrong – maybe that has changed, but not cleaning up after yourself if a step during the installation failed is not how to write an installer).