Obviously high supply of animators is the main reason, but I wonder if part of it is that pirating/illegal streaming sites are extremely common for anime. All of the people I know that watch anime do so without paying for it. It's trivially easy to find anime for free online, so much so that it's easier to find it for free than pay for it.
I think this has something to do with it. Piracy is a big problem for Hollywood too, but they make most/a great deal of their money at the Box Office anyway, something the this industry does not. At least in the western market.
