It always boils down to money.
Networks produce these shows because all you need is a camera crew. You don't need paid actors, stages, lights, writers, none of it. Just people who are willing to degrade themselves on national television. Everything from The Bachelor, to game shows, to people hunting alligators, to dysfunctional people living in Hollywood, to people auctioning their junk, to people surviving in the wild, to pregnant 16 year olds, to court shows, to Dr. Phil, to people struggling with drug addictions -- it's all cheap to produce.
This is why people can afford to scrap a show if the first season goes bad, and simply move on to the next, ridiculous idea of a show. The investment/return ratio for reality TV is better for the networks and less risky (financially speaking) than scripted...
It's pretty sad, but it's also given me a reason to just stop watching television altogether which I'm grateful for... now I just (unfortunately) pirate a handful of television series I'm interested port it to my iPad and just watch it there. I'll also watch HBO and other exclusive home movie networks from time to time.