Actually the best VCs get even better terms - e.g. 3-30. But I've heard VCs say that anyone who comes out with sub-market terms in their fund has a positioning problem: the best returns come from a tiny number of firms, and the returns dwarf the management fees, so LPs are entirely concerned with quality and only minimally with cost.
Were I a limited partner, I can't imagine giving such terms to any VCs lacking a stellar track record. I understand why the rest of the VCs would want to position themselves thusly, I just don't understand how they can actually find LPs willing to go along with it.
