if a contact has it set up

Well, there's your problem.

The most commonly-used mail client in the world is the Gmail web client which does not support it. Uploading your PGP key to Gmail and having them store it server-side for use in a webmail client is obviously problematic from a security standpoint. Number 2 I would guess is Outlook, which appears also not to support it. For most people, I don't think they understand the value of cryptographically signing emails and going through the hassle of generating and publishing their PGP keys, especially since Windows has no built-in easy application for generating and managing such keys.

There's also the case that for most people, signing their emails provides absolutely no immediate benefit to them.