Your question is a bit loaded considering stats tell us that amount of people playing Axis and Allies is fairly similar at the top levels in 1's and 2's and while I'm no Axis only player I'll deffo comment on why I like both factions.
Ostheer: Tightly designed (outside of T4 that is). It's linear, versatile and feels like it wasn't made by a vindictive wizard. When I'm playing Ostheer my commander choice augments my strategy rather than changing it entirely or making it artificially weak in other area's. The only issues the faction has is more vulnerability to RNG bullshit and having way to expensive teching without incentive TO actually tech.
OKW: Probably my favorite faction atm. I was pretty much totally read to switch to Ostheer as my preferred faction but the recent changes are pure sex and they reinvigorated my love for the faction. I enjoy how Relic just decided to say "fuck it lets make everyone sound evil and throw around super weapons" so naturally as a fan of 40k strategy games this was right up my alley. The desperate underdog feeling of OKW also is quite cool and I like how desperate many of the units sound. Of all the factions it has the most ability to come back from what can be sure defeats and it's very awesome.
The only real shitty things left in OKW are the gimmicks that are still left. They need to condense the factions units vet down to 3 (just make the 3 levels of vet they get be really fucking powerful) and remove the fuel penalty (raise the price of teching a little bit to compensate). That + a non-doc suppression platform for late game plus a Howitzer counter and OKW would be literally perfect.
Ketetof, please, save us.