Because the 1.3x sensor is a lesser sensor than FF.
Correct - in terms of the area dimension of the sensor, APS-H is smaller than FF. So what? "Full frame' is the lesser sensor when compared to MF - maybe we should all harass Phase One and Hasselblad for a 10 fps camera (or, at least, to measure frame rate in frames per second instead of seconds per frame...)?!?
APS-H meets the needs of some photographers, and not others. It's always best to use the right tool for the job, and Canon supports that with a variety of sensor formats.
Regarding the comparisons to Nikon, I don't think those are really relevant at the top end of the line. The market fraction that chooses one of the highest-end bodies (1D/1Ds, D3x/D3s) as their first camera must be infinitesimal. Those who upgrade/replace into the flagship series have already bought into a system, and if they are changing systems, a cost difference in the bodies is a fraction of the total cost (new lenses, etc.). As it stands now, the difference in price between the 1DIV and D3s is insignificant (4%), and the difference between the 1DsIII and D3x is still not that meaningful (14%).