Because it enables a very simple transaction: I am exchanging money for your good and/or service, so you try to provide me the best experience you can.

If Starbucks gave away free coffee but monetized their restrooms, their coffee would eventually end up full of diuretics.

It doesn't work with SaaS startups. The goal of a typical startup is to get bought. The so-called "exit". Which basically means they don't give a crap about their users. They'll lie to you on their front page that the want to create an awesome service, but it's all a trick to get you to sign up - because the more people sign up, the bigger growth they have, and the better chance of getting bought. And when the buy offer comes, the product gets shut down, paying customers or not.

It might not hold always, but it is a very good rule-of-thumb.

Normally, a company (either startup or not) cares most for its clients, because they are the ones that pay its topline and ultimately its workers' salaries. Other parties (users, providers, government, whatever) also have power and can also influence the company's behaviour, but clients normally have it easiest.

That does not always hold, as I said. Another example is you being a commodity client; if the company is, for example, more interested on big clients, your interests might not be the first concern for that company. But they will have you in mind, nonetheless, as the bad service you receive can signal something bad for bigger clients. Sometimes, even big clients are commodities, as they can't wield a lot of power, so the company can act not in its client's best interests (monopolies or tax burden when price is inelastic are scenarios that come quickly to mind).

That's why I mentioned SaaS startups - because they're both an exception to your rule and something HN demographic has to deal with a lot.

I still don't buy that rule though. Let me illustrate it by a graph:

                                 .....
     |             ooooooo ......     .
     |          ooo    ....oo          ...
     |       ooo   ....      ooo          ....
     |     oo    ..             oo            ..
     |    o    ..                 o             ..
     |   o   ..                    oo             . profits
     |  o   .                        oo
     |  o ..                           o user satisafaction
    -+-o-.---------------------------------------------------->

Companies have figured out that the point of maximum profit is not aligned with the point of maximum user satisfaction, and they only care about the former - the latter is a proxy. In every mature market we're past maximum user satisfaction point, and this is what we perceive as "products getting crappier".