Imagine the Landlord owns 10 properties and sets the rent to $2k/mo on all of them with 1 property remaining empty. Maybe that last property could be rented out at $1.7k/mo but from the landlords perspective that puts downward pressure on the rents of his other properties.
If one of the landlord's existing tenants moves into the cheaper property it's even worse. He loses $300/mo and now has to consider reducing the rent on an additional property. Should he find a new tenant at $1700/mo, he still feels like he's losing because he believes the rent should be higher.
From the landlord's perspective, it's better to squeeze if he has sufficient cash flow. Especially given the belief that lowering the rent will negatively impact the value of the property.
While you're correct that mortgage and tax are fixed costs that need to be met, you haven't considered that landlords have multiple options to offset those costs. When interest is low they'll use equity release and interest only mortgages.