The clearest benefit of conferences for developers is networking and the "hallway tracks" -- the emergent discussions that arise after talks. The social processes of these are hard to replicate online. The asynchronous nature of online text chat, perhaps the most apt widely-deployed alternative, already lessens the urgency and spontaneity of the discussion. There are people who don't take advantage of the opportunities to insert themselves into emergent conversations, and unless their presence alone is a positive signal for the company, they're largely wasting their company's money.
The clearest benefit of conferences for sponsors is the potential lead between frontline-but-backoffice workers who work on a particular topic to the decision-makers behind them who can influence purchasing. Being present at conferences fosters passing familiarity of developers with the product, which helps conversations that occur between those developers and their bosses later: the emails from the higher-ups that ask "what do you think about Product?", and the off-the-cuff gut assessments that follow. Irrespective of the developer's initial reaction, name recognition of the product sticks around and often makes it to later rounds of evaluation and assessment.
The clearest benefit of conferences for sponsors is the potential lead between frontline-but-backoffice workers who work on a particular topic to the decision-makers behind them who can influence purchasing. Being present at conferences fosters passing familiarity of developers with the product, which helps conversations that occur between those developers and their bosses later: the emails from the higher-ups that ask "what do you think about Product?", and the off-the-cuff gut assessments that follow. Irrespective of the developer's initial reaction, name recognition of the product sticks around and often makes it to later rounds of evaluation and assessment.