Reason: think of all the gallons of milk and processing it takes to make an unit of cheese.
Source: Someone whom worked at a Pizza Hut in South San Jose in high-school.
PS: Another interesting business model (in Texas) is Braum's, which is a large co-op ice cream/restaurant/convenience store chain run on behalf of a consortium of dairy farmers. This cuts out middlemen and is basically direct-to-consumer. The prices are much lower than similar SKUs in local grocery stores and the quality is quite high.