Because they aren't wealthy enough to be worth a lot as taxable income and didn't control an area with dense/lucrative enough natural resources to be worth subjugating. Without money or something that could be converted to money there was no reason for the city slickers to go out of their way to impose/integrate (word choice depends on which side you're on) their culture. You can see this pattern more or less worldwide. On every continent there are people who live in the remote parts, nominally under some government but are mostly left to do their own thing because they have little to take and take little from the government. If you want to be left alone it's best to be someone not worth bothering.
I agree that it's nice to see them become more of a defined culture (language and all) since being obviously delineated from the rest will help them maintain their own autonomy and culture.
Yes, although a mix of incentives and force has moved nearly all of the people into towns and cities at this point, and in fairly recent memory. I remember when Atanarjuat came out twenty years ago the talk was that the timing was good—there still were many people who personally remembered living in the traditional way, well enough to recreate it vividly and accurately on camera, but they had to be brought out from the towns to do so.
The Inuit are one of the few indigenous groups in Canada that managed to keep their culture relatively intact - most other groups have lost much of it through centuries of colonial rule and ultimately with residential schools, while the Inuit were comparatively neglected - both in positive and negative terms.
Good to hear steps being taken to protect the language.