I think it is because we humans are not rational.

In a free market society, over time, every seller would charge for their service as much as they can. And the service they themselves use, will in turn charge them as much as they can.

This would be an optimal system, if only humans were rational creatures. When prices for a service increase too much, we should stop using it and go for alternatives, which would create more incentives for competition to grow and prices to come down etc.

But i think, we don't think rationally. Sometimes, even when we know something is bad for us, we still do it cuz of lack of self control or other reasons.