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I have been to Luxembourg three times so far.
Most people in their 20s want to get laid, have fun, go out and see the world. You won't get (most) of that in Luxembourg.
Life is short, most want to have a family in their 30s and want to enjoy life in a fun city before they settle down somewhere.
Also, while Luxembourg isn't a bad place at all, it is not comparable to London or Paris or NYC. A more conservative, slightly backward place. Slower than big city life. Not very diverse. (most of these things might also be the case in many other European places).
You have a point. I am not going to lie. I had my fair share of that kind of fun while in business school and want to focus on building my life up now.
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