Because it's simple and my wife and child can use it. Your "solution" is overly complex and relies on a bunch of cobbled together parts.
Also, the cable providers economically incent you NOT to do that. If I went a la carte for just the bandwidth, it would probably be $100+. The upcharge for the DVRs and the premium channels is trivial.
My 4 year old uses it just fine as does my wife. The only interface they are dealing with is Plex, go look at the UI, it's clean, simple, easy to use with nice big posters for what you want to view. The other stuff you would have to deal with, which would take a whopping 2 hours of your life to set up. Once it's done, it's done, you only have to add new TV shows or new movies to the watch list and everything gets downloaded and added to Plex automatically.
The upcharge is only trivial for the first year while the incentives are in place, then after 12 months the price goes up. On top of that you are paying monthly rental fees for each device, again, which will go up after the first 12 months and most providers make you sign a 2 year contract tying you in to at minimum 12 months of higher rates.
Fiscally it makes no sense to buy into cable subscriptions when you can watch anything you want for free with a few hours of effort.