The accepted answer and the supporting answers are all good, but me living in a country neighboring Romania, and having too many flights between the UK and my country, the explanation is much simpler.
We're generally poor. We don't get to fly that often, half these flights are filled with older relatives visiting their migrant children. So a flight is generally an exciting, new and most of all scary thing for these people.
What the applause means is "Great job, on landing and not killing us, bravo" It's comparable to the "thank you" on your way out of the UK bus.
I personally hate this, as I've already payed my ticket, showing my trust with the company and by proxy, the pilot, and moreover he's much more concentrated on finishing the landing to hear me clapping at the back ... As mentioned in the Question, much more extraordinary things need to happen, for the pilot to earn my "Thank you for doing your job"