Hedge fund managers make that much money because they earn much more money for their clients. And less than 1-2% of them can beat the market consistently, and only these 1-2% are accordingly compensated.

And it's not like there are high barriers of entry. Everybody can call local Bloomberg office and arrange for trial terminal subscription (I did it once). Or pay around $75/month for realtime market data feed and test strategies on it. Compare it to, say, becoming a dentist.