The reason, is that bandwidth is a solid profit center for the cloud majors. Amazon initiated it, the rest are going along in cartel fashion, nobody wants to disrupt one of the lucrative angles by driving that profit center toward zero.
There's no other rational explanation why Azure or Google aren't hammering AWS on bandwidth cost as a competitive angle. They're basically conspiring in the industrial sense, no different than airlines that somehow magically agree to simultaneously raise prices or department stores that for decades all agreed not to discount the perfume etc. box section of their stores.
No need for conspiracy theories. When one market participant anchors a price at a high premium, you don't need to collude to know that undercutting them is a scorched earth strategy that causes both of you to lose. Part of this is because financial markets value your revenue more than market share, and undercutting bandwidth pricing hurts the former more than it helps the latter.
High bandwidth costs also make it more costly to move some of the data processing to companies which offer very cheap dedicated servers.
--
But it's not fair to say that price from Google is high just because some random hosting company gives you unmetered 500mbs for $99/month. As we have seen with many unlimited cloud storage offerings, some companies do unsustainable offers to attract customers. There are different strategies behind this. Some just count on that majority of customers won't use everything they could. Others know the price hike is inevitable, but believe customers will still stuck.
There's no other rational explanation why Azure or Google aren't hammering AWS on bandwidth cost as a competitive angle. They're basically conspiring in the industrial sense, no different than airlines that somehow magically agree to simultaneously raise prices or department stores that for decades all agreed not to discount the perfume etc. box section of their stores.