They appeal to the 'mainstream audience', not techies or even the smarter half of the population.
Its a mix of HN elitism combined with gross over estimation of cultural impact WRT a cultural icon that doesn't matter anymore.
They do not broadcast to the mainstream, they try to steal away fractions of a percent of weirdo daytime news network junkies from other networks, not boost viewership from the 99% of "normal" people who don't watch that kind of thing.
Its like top40 music or hollywood movies in that way.
It can actually be that the average CNN viewer is exactly like the average person in United States. I don't think that's true, but I don't think the typical viewer is that far from the average.
The appeal level is extremely low (99% of the population would rather do anything else) and the barrier to entry is extremely low (its marginal cost is "free" if you have cable and a tv, and how hard is it to turn on a TV?) and the marketing is extensive (who in the USA has never heard of CNN before?) The content is highly formulaic and repetitive, typical characteristics of things that only appeal to a small minority.
There are numerous business scenarios I can think of where a perfectly mainstream biz model fails because of problems with at least one of the above, but CNN and daytime news networks in general have no such excuse, they're just not mainstream anymore than sy fy channel or tennis channel is mainstream.
I'd argue that the "smart" portion of the population is even less than you figure. It depends on what you interpret to be smart. With my own personal judgment, intelligence, true intelligence, is derived from skepticism, curiosity, and a thirst for knowledge, not by success financially.
If we use those criteria, I'd say that most people in that list would be about 1/8th down on the bell curve. People just don't care, I've seen it with my own family.
(And FWIW as much as we love to complain about the newspapers I find TV news, even on the BBC, is the worst form of news reporting out there)