Why don't European restaurants do it. Is food more expensive there or is it just considered bad form or somehow un-sophisticated to serve giant portions.
I would also guess that it depends on the type of food. High quality, fresh organic produce is a lot more expensive, so perhaps for some food items it really is about the price. For example the fish in fish and chips could be some really expensive fish. Doubling the portion would be a lot more than adding another $1 to the cost.
Culturally food quality is considered more important than quality. Also, higher quality ingredients cost significantly more. So basically it costs them more to do so, and their customers don't care.
The food is a very small part of their costs. They can double the amount of food for a cost of $1, charge an extra $2 AND have many more customers for their great value!
It's like selling home PCs with a 1Tb drive, most users don't need it but it only costs them $5 more than a 500Gb drive.