klswift, it's because the price point seems reasonable for fat quarters, but yes -- quite often you even pay more per yard with fat quarters than you would just buying yardage. But then to get the variety many people crave is beyond their price comfort point. For me, I don't worry much about under $20 purchases here and there, but to go in and spend over $100 on fabric at one time? Pretty much impossible on my budget but that's on the low end of what a typical not-on-sale queen sized quilt top in my area.
I buy thrift store fabric typically around $1-2 yard to keep me sewing, today I got a lovely bag with a full half yard of an easy to use indigo Moda print, several smaller pieces of metallic embellished Asian fabrics, and a couple other odds and ends for $4.99, it wasn't on tag sale today but it was worth that price and it won't last the week.
I saw a similar thread to this about a year ago that Dollar Store had fabric, been looking ever since but today finally found some! Label calls them 100% cotton craft fabric. Got two fat quarters, $1 each, one of a white with bright polka dots that is just right in my wheelhouse, and a funky dog print also on a white background. The two certainly can be used together, quality seems ok but I haven't washed them yet.
Another place I was surprised to find fabric and was because of a thread here was a Tuesday Morning, they have various layer cake and other quality fabrics for about half the usual price. Don't know if it is worth me going there on a regular basis, but worth stopping by the rare times I'm passing it.