It's unpopular because it's a bad idea. Sometimes products or services aren't unit economical at small scale and need to be subsidized until they are adopted en masse.
“Chip War” by Chris Miller describes how Silicon Valley first successfully pulled this off, when Robert Noyce spearheaded the selling of chips at or under manufacturing cost in the 60s to wean off dependence on government contracts and get regular customers interested. It did work in that instance, but I guess the real question is when & how that framework should be applied.
A tempting idea is to judge whether or not the final good/service is indispensable for the users (and how likely monopoly can be established), such that prices can be raised to recoup the losses. But that alone doesn’t seem to be sufficient as shown by the MoviePass collapse. Lots of ingredients to get right!
