There was some stuff in Legends about a mineral rush that dried up fast (literally and figuratively) leaving a bunch of abandoned sand crawlers behind for the Jawas to co-opt. No clue if any of that's been reintegrated.you'd have to wonder what would induce some-one to settle on Tatooine in the first place.
Don't recall any canon mention of anything that really made the place enticing as settelment so maybe it was simply it's location as the arse end of the galaxy out of the eye of the Old Republic and galatic empire.
Like I said though, people have been around the galaxy long enough that the place could have been a tropical paradise when the first and second wave settlers showed up. Hell for all we know the Jawas & Tuskens could be their decedents.
Anyway, I don't think anyone *willing* settles on Tatooine anymore unless they're explicitly there to disappear. Most everyone who lives there was either born there, or didn't have a choice in the matter. Getting off planet is likely a non-trivial task for most. Remember that Luke had to sell the most valuable thing he owed just to afford an *advance* on a ticket out of there. If Owen & Beru sold the farm, the homestead and everything they couldn't carry on their backs they might be able to afford a flight off world...but to where, and how are they to live? Make for the midrim and live as refugees? Find some other backwater and start over? How? With what? Even if they found work, a lifetime's experience in moisture farming would mean exactly feck all on anywhere that isn't a desert planet. Even that's assuming the dodgy freighter captain they hired (because that's the only kind that come to Tatooine) doesn't just sell them to the Hutts?
There's a reason why Biggs & Tank left for the Academy and why Luke was so eager to join them. It's literally they only hope for any young person born there to get off that dustball