Yeah, I know that neither "USD" nor "BTC" on Mt. Gox are meaningless concepts, but what is the thinking of users who (apparently) continue to sell GoxBTC for GoxBux?

If you think Mt. Gox is totally insolvent and will never pay any depositors, it shouldn't really matter what you hold on the fictional exchange. (And for what it's worth, since Mt. Gox has taken fees out both as cash and BTC, I suspect they are much lighter on cash than BTC. After all, their expenses are in cash. If any depositors get paid in cash, Mt. Gox's Japanese trustee, or whatever, would probably first need to liquidate the BTC.)

OK, so if you think that Mt. Gox will only pay out cash deposits, maybe you'd prefer to hold GoxBux. But if you're wrong and they do recover BTC withdrawals, you've just taken over an 80% haircut at current GoxBTC prices. That seems unjustifiably large.  The correct price for GoxBTC should be:

[BTC market rate] x [probability Gox recovers] / [probability Gox folds and does pay "USD" (times percentage paid)]

So if you think there's a 90% chance Mt. Gox fails, and a generous 50% chance it fails and pays USD deposits at 100%, you would still rather hold GoxBTC selling at 100 GoxBux (the current price), because in the unlikely event Mt. Gox opens withdrawals, you'll preserve your coins at full market value (EV = 0.1) instead of the "likelier" event of getting paid in cash (EV = 0.5 * ~0.18 = 0.09).

I'm pretty skeptical of Mt. Gox recovering or depositors getting paid back only for cash--so why is the price still driving to zero?

I have no idea. What's strange is that there are almost no Bitcoins for sale on Gox. The total market depth on the Bitcoin side is only about 500 BTC.  On the dollar side, somebody keeps putting up a "wall", and then takes it down and retreats as the price drops. The market is very thin. Maybe some people left trading 'bots running.