I could throw out a very long-winded answer, and there are a lot of reasons, but some primary ones are:
Twenty years ago Apple made a decision (actually, Jean-Louis Gasse) to appease its shareholders and go for "profit margin" over "market share". Big mistake. They made a lot of money and the shareholders were happy, but they were losing ground to the cheaper machines. They never made it up.
The public at large has a proven track record of accepting cheaper alternatives as long as they're "good enough". The VHS/Betamax is the classic example of this.
Had Apple chosen to get Macs in as many hands as possible, almost as loss leaders, it would have been interesting.
For a wonderful, rich history of Apple's early years, directly from the developers who gave us the Mac, visit:
www.folklore.org
Note that it's mostly about how the Mac was developed, not so much about their market share and business model.