Because the company has more than expenses to think about - they have to create a loss reserve (a large account set aside to pay claims) based on actuarial analysis. The odds of a total loss from a Katrina-like hurricane have now gotten so high in Florida that they would have to charge homeowners huge premiums to establish an adequate loss reserve and limit their risk by only taking on a few homeowners in any given area - thus the loss of availability. If State Farm already covers twenty houses in, say, Palm Beach, that's the limit - they won't take on more risk in that area because of the way hurricane damage occurs.
The existing housing stock is pretty much uninsurable - if everyone tore down their wood frame houses and moved into concrete domes, I'm sure the companies would come back.
Let me guess...because the rates are regulated?