Probably because it's a model with BIG problems for the studio from a business perspective:
Right, but it's also an excellent marketing strategy; notice that I said 95% of dance styles. How much money can they make off teaching me the remaining 5% to intermediate or advanced level? Gotta get them to light that second or third cigarette or you'll never have them hooked for life.
One of the studios about an hour from me ran a teaser weekend; way too short lessons in Texas Two Step, Country Waltz, Slow Waltz, Foxtrot, and some basic East Coast Swing, followed by a dance focusing on those styles. About 60 people showed up. According to one instructor, if they sold three couples on a beginners' group class, they'd break even on the instructors' time, and as a bonus, their regulars came to the dance and worked with the newbies quite a bit just for fun. By the end of the evening, at least one guy who had clearly been dragged in by a girl that was obviously friendzoning him was signing up for private lessons because he turned out to be something of a natural at the two step, (or at least had the confidence to make it look that way) and pretty girls kept asking him to dance. (For all I know, they may have planted a few pretty girls in the crowd with instructions to go after the guys wearing wristbands from the class. Either way, it worked.)
AFAIK, their plan for next time is to break it out over a couple of days and work on each dance to the point where most students should be confident in getting out on the floor and actually getting some useful practice. Speaking from experience, going from being the guy who can't even get the creepy girl with a mustache to dance, or being too scared to ask even the sorta cute one standing alone looking longingly at the dance floor to having a gorgeous blonde asking me is a powerful motivator to keep learning more. It didn't take selling my soul to Arthur Murray to get there, either; just enough confidence to keep good posture and a smile through a bunch of basics and a couple of turns.