They did. However vinyl was considered better than 8 track. Cassette was a lot more portable than 8 track, and so where portability mattered it won. Elsewhere vinyl was considered better than 8 track and so it won (a few years latter CDs came and won).

Those who really cared about sound quality had reel to reel tape, but that was very rare. Almost no albums were ever released on reel to reel. You typically bought the vinyl and copied it to your own reels thus ensuring there were no scratches.