Because the guy making the decision (the professor) doesn't pay the cost of that decision. Publishers give the professors free books, and court with them (like big pharma courts doctors) to convince them to use it.
There are other reasons, like the big advantage that inertia gives you: once your book gets established as the best book in one field, at say $40, you increase the price to $150 b/c the professors already know the book, so there is a big switching cost (for them).
What actually baffles me is why people think this would NOT happen. Align the professor's incentives, and you'll start seeing some change.
Here in Tennessee, profs have to sign a form when they pick a textbook stating the cost. Unfortunately the deadline for picking books is about five months before the class, so some crappy, expensive books stick around because the time near the deadline is too busy to consider alternatives. Free books will only get you on the list for consideration.
There are other reasons, like the big advantage that inertia gives you: once your book gets established as the best book in one field, at say $40, you increase the price to $150 b/c the professors already know the book, so there is a big switching cost (for them).
What actually baffles me is why people think this would NOT happen. Align the professor's incentives, and you'll start seeing some change.