Vegas used to be the land of free stuff to reduce all barriers to gambling and keep you around gaming: free parking, free drinks, free shows. Rooms were cheaper than you'd expect because it was subsidized by the gambling. All of that is gone now.
I think they are convinced they can survive on milking rich idiots. I don't think it makes sense from a scale perspective. Vegas always builds way too big because they never want to turn away gamblers due to lack of space. But it's really expensive to cool and maintain enormous spaces.