But is that because mobile game developers made a conscious effort to just focus on making money from IAPs, or because the economy on mobile is so badly skewed?

A $10 game on Xbox, PlayStation, or even Steam is considered fairly low-cost. On iOS or Android? Very few people are going to buy that.

Then isn't there a market for mobile games targeted at the more traditional gamer? Example being hearthstone for mobile.

I think there's a market for the traditional gamer. I think mobile games geared towards them get drowned out in the sea of ... optimized filth.

I think AR headsets like Hololens will offer an opportunity to appeal to more traditional gamers first before, as you so humorously put it, "optimized filth" becomes the mainstay. This is due to, what I think, is a positive correlation between people that are early adopters and people that are gamers.