While I agree with many of the other reasons and believe people in general can't estimate very well, I believe that for businesses this is indeed the fundamental reason. Even in a relatively understanding and engineering-centric environment, when I give what is probably still a bad under-estimate, I will get pressured on how we can reduce that number. I can't even imagine what it would be like in an environment that wasn't relatively understanding and engineering-centric.

If you don't want to hear the truth, you won't. Humans have known that since long before software engineering existed... or a subset of them, at least.