Because then you look more expensive compared to the pre-tip prices of other restaurants. As long as businesses can get away with posting prices that are less than what people actually have to pay, this silliness will continue.
Yep. For whatever reason, charging $50 for a restaurant outing and expecting a $10 tip gets perceived as being a better deal than a restaurant that charges $60 and does not allow tipping.
I agree, why not just reflect the true price of eating a meal in a restaurant which includes paying servers.
My guess is that it is more transparent to both the customer and the staff who may view this development with some suspicion at first.