I find your excessive faith in businesses disturbing.
Markets aren't rational [1] and the wage-labour market isn't either. Sometimes there's no good reason for something, only a bunch of chain of consequences that don't necessarily have to make logical sense from an utility perspective.
[1] https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-c...
Embedded systems are part of tangible products. They have an order of magnitude greater non-recurring engineering costs, then cost of components, manufacture, packaging, inventory, distribution and after-sales service and support. Due to the huge up front costs, volumes are generally limited by capital funds. So the net profits are likely to be 15% - 20% range.
When you look at the differences, it becomes clear why tangible product companies are unable / unwilling to pay like software-only companies.