Why can't they have a nice MKII upgrade for photos only at about $2500 or lower?Because that hypothetical camera would have to sell as many units as the MkIII with video AND cost 30% less to produce (in R&D, manufacturing, etc) for Canon to offer it at $2500. Since selling fewer units would mean R&D/manufacturing costs aren't recouped the same...and $2500 is a 30% off discount from $3500.
Reason: greed + ways of charging more for "features" some don't need...
And you'd have to have the market research that proves that over 50% of DLSR users don't like video and would prefer a camera without it. Otherwise, charging a premium for video might be making a LOT of customers mad in the same way not offering a cheaper/non-video DSLR makes you mad.
I'm gonna go ahead and guess they've done that research...and those calculations...and know they'd be hurting their sales by going that route. I'd say the fact the only non-video DSLR you can find is a luxury brand like Leica means other companies agree.