Why do some people pick noses? Isnt that unsanitary and gross?

Depends. More likely to be unsanitary for the nose picker. Placing dirty fingers into your nose can colonize yourself with bad bacteria such as MRSA. Whether or not it is "gross" is cultural and a personal preference. The setting matters too!!
Habit. Picking ones nose is very acceptable in most asian cultures. For some western people picking the nose is a habit. For others from western culture it may be a way of satisfying the need to do something taboo without any moral infractions.