"I'm really not sure but I think it's important to look beyond just "haha, stupid managers, they can't make up their mind". There must be deeper reasons."

You might take it as evidence that, of all the myriad aspects of a business, scale far outweighs all other factors for generating a profit.

You don't have to be "good" (whatever that might mean) to generate profit, production costs just need to be marginally cheaper than your prices.