The problem is that most people don't care. I've heard many people say they don't even notice the difference between SD and HD. WTF? Although I would have to say that while it was a lot softer, I was watching a DVD screener rip of a new movie the other day, and that was a better experience than HDTV with all the compression artifacts.
Bandwidth is the issue. The cable providers can't handle more than a channel or three of 4K, if they could even do a decent 38mbps 4K stream (they probably could with MPEG-4). They could do good quality 1080i and 720p, they just don't want to spend the money to get into 1ghz systems and SDV when the majority of their customers don't pay any attention to the video quality.