Most commuters in my city that ride more than 5km to work have adopted at least some lycra as part of their kit. It handles sweat better in summer and can be rinsed of sand then spun and air dried in winter, so you aren't getting into cold wet gear for your ride home.
My city commonly has a sea breeze with a wind speed over 35 km/hr in summer. A lot of committed cycle commuters end up adopting road/racing bikes simply due to it being more efficient energy wise. Riding a hybrid or MTB into/across the sea breeze is significantly more fatiguing.
Many people here also cycle casually for exercise. These are more leisurely rides specifically for fitness. It is rarer for people to ride to the shops, restaurant or a friends house. Why? because they don't want to turn up sweaty in summer or wet in winter.
Note that cycling in general has grown in popularity in the past decade here, regardless of the above:
http://www.roymorgan.com/findings/6237-cycling-participation...
Australians are a sports mad bunch. We have had the Tour de France televised on a free-to-air channel for over 20 years now. Since the early 2000's this lead to many more people becoming interested in road cycling, especially men. This resulted in more cyclists on the roads (especially MAMILs). The increased number of cyclists on the roads, has in turn lead to more people being inspired to get on they bike for a leisure ride or to try cycling to work. Prior to that many people I spoke to would cite having to ride on the road as a big factor in deciding not to try cycle commuting as they perceived it as too dangerous.
So cycling as a sport has had a big part to play in getting more people cycling in general over here.