But the UI is the product for the user. The amount of lost goodwill (and lost customers if there is an alternative) is real money ie. less-than-max profitability. It baffles me because UI design needn't be very expensive.

Paying attention to how users work and and what they need can also be extremely profitable. The entire idea for Microsoft Office came from our discovering how often they were struggling with differerences in basic UI between say Excel and Word (which were quite different back then). Also how often they wanted to say copy data from Excel to Word or embed an Excel table in a Word document.

Based on this we decided to make the products more compatible in UI and able to work together better. It was a huge challenge because the products were designed by different teams that intensely belived in they way they had chosen to do things. It required Bill Gates to push it to make it happen and even then it was difficult.

Office 97 was the result and Office grew into a product that made billions for Microsoft. This came from our obsession with user experience...

I think we all agree. I should have rather said maximum short term profitability : fancy features and half-baked UI redesigns, rather than carefully improving the efficiency of the existing ones.