I know this is something that must have been asked a million times but I had other things on my mind when the time came.
I was expecting it to be still possible to buy episodes individually when ToMI came out. In retrospect I don't know why I thought it was a better was to go about things, unless I was looking at it as 'try before you buy' which made little sense as each game has a demo (though sometimes that might not be enough of a taste).
The only thing I can think of was the marketing strategy they had for a while of giving people codes to get 1 chapter of any game for free. I got 3 episodes of Wallace & Gromit this way. But they could have simply altered the policy and ran similar offers as "1 free episode of any game you haven't tried" or "1 of the game you've purchased the fewest episodes of (if you've had at least one of each title)".
That's the only way I can think of in which it might have been unprofitable.
If you install the game episodically but have to pay for it as 1 lump of a game then what's the point of being episodic anymore?