I suppose part of it might be tradition, but WotC's D&D business model doesn't really allow for only having a single book/core three. Hm, now I'm curious on how economical the splatbooks are.
This is part remembering that old internal document and part "hearsay" from industry people:
According to WotC research, people generally bought stuff for about 5 years and then moved on to other stuff. That is why they settled on the 5 year cycle for editions, and intended to do so whether it was needed or not. Clearly it was needed to get rid of 4E. Theoretically 3.5 could have just been cleaned up. 3E needed to be cleaned up and was apparently good enough to get "just" a cleaning.
Of books, everyone was expected to buy the core books, including players buying the DMG and MM. Only the DM could be expected to buy an adventure, and several members of a group would buy splats.
Everyone would buy other stuff like dice, character sheets, and so forth, with the biggest item being miniatures.
In terms of profitability, mostly it depends on what you consider "profitable".
Splatbooks at the start of the cycle would have prints runs around 10-25K. Compare that to core books which have print runs around 100K.
An adventure near the end of the cycle printing AND selling 50K would make a game company person have an embarrassing incident. It would make a Hasbro executive wonder why they were even bothering.
Back in the day for wargames, the profit breakdown was:
Half for the store.
Half of the remainder for the distributor.
Half of the remainder for the printer.
Half of the remainder for parts.
The remainder for the company.
I'm pretty sure splatbooks are running around the same, but I haven't heard anything from inside on that in well over 5 years.
$50K/year is filthy rich/top tier/who did you blackmail? pay for a company staffer. Regular people make much less with "job security" a more fantastic concept than the stuff in the books they write. Once that runs out they may try and survive as freelancers, who generally have day jobs unless they are really good at getting comped on the con circuit, have a special ability thrive on Ramen noodles, have a devoted fanbase with lots of surplus cash and no self-control, or all of the above.
Basically, the whole industry operates on the fringe. Every once in awhile it strikes gold with something, then they cash in on for a year or three and hope they can cash in even more before anyone notices the profits draining back down to oblivion.
More simply, why do you think they everyone and their brother, including what you'd think are completely solid companies, going the crowdfunding route? Never mind the startups that don't have the money, more and more of the big boys don't want to risk the expenses until they have cash in hand.
TL;DR
Economical?
Are you serious?