A lack of demand for hard drives would cause a surplus, lowering prices on HDDs. However, SSDs have only a tiny fraction of the market right now. HDDs are cheap for other reasons, such as competition, market saturation (there's a zillion to choose from) and improved capacity/longevity. If you have a TB of storage use very little of it, and it lasts you 7 years do you need to buy another drive? Probably not. This is what causes lower costs. HDD manufacturers have also found ways to lower costs, using smaller processes for the controller chips found inside the drives, and so on.
I agree with descendency in that the hearsay about MLC drives is enough to stop many people from jumping on board with SSDs. If you can't be sure what you're getting, it's better to just wait until something is fast and affordable and you know it's good. As long as places like Tom's keep reviewing the cheapest drives, telling us how to tweak them for our OS so they work right (most of us are still on XP) we will begin to start using them. Until then, HDDs are tried and true and cost only pennies per GB.