And space observatories are much much more expensive than ground-based ones. JWST for instance will cost around 10 billion dollars in the end - and they don't even have to pay for the launch cost (one of the contributions of ESA to the project is free launch on Ariane rocket). JWST will have a 8m mirror. Currently three 30m class ground-based observatories are being built (ELT is 39m, TMT 30m and GMT 24.5m) each with an estimated cost between 1 and 1.5 billion dollars. So you get three much much larger ground-based telescopes for the price of one large space observatory (and still have money left over).