The actual numbers might be more like rent $1400 vs mortgage $1000. After property taxes, insurance, and maintenance there might be $50 left. A handsome 3.5% profit, rising to maybe 6-7% if you include principal paydown. This is hardly a money-printing machine. It's a steady return for taking on some risk.
Kind of an unhelpful tangent to the discussion, really.
You can buy a boat for $10 or rent one for $9. Assuming you really want a boat, would you buy or rent? Do my numbers reflect reality? Do they have a bearing on the choice you make?
Renting has annoyances but it also has flexibility. A flat "more expensive" is staring at one tree and missing the whole forest of tradeoffs. Way more people would choose to spend $50/month for that flexibility versus $700/month.
If there was no profit there would be no landlords. Some might say that's great. But it would be a world with less flexibility, with fewer choices. Don't like your job and want to move? Split up with your partner and need someplace to live? Moved to a new city and don't know where you want to put down roots yet? At college for 4 years? Don't want to deal with house maintenance? "F** you, buy a house anyway". That's what we'd have if there was no rental housing.