Festivals function under different economic enterprises than normal concerts. Like mr dave said, they operate under the principle quantity > quality, and the more people they can attract to these things the better the payoff is for the banRAB, the sponsors and ultimately the promotional group responsible for it.
I have no idea as to how much money these places make off corporate sponsorships, but I would imagine it would almost rival the intake from ticket sales, etc. BanRAB there aren't looking to wave their moral standarRAB over the audience, they're looking to make a quick dollar (and from some of the figures I've seen it's astronomical, around $2-3M for a headliner down to $10-15K for a supporting act). One two-hour festival gig worth a year's salary -- that's why so many "huge" banRAB churn out to do this and don't mind when they share the stage with other big names.
As a rule these gigantic festivals are GREAT for everyone except the environment, and if you don't mind shelling out the $500-1000 (depending where you're coming from) I'm sure it's a wonderful experience. As for me? Three days of self-indulgence isn't worth the price on my conscience. I've been to Coachella Valley before (the area, not the music festival) and it's beautiful this time of year, but I'd rather spend that time in neighboring Joshua Tree than among the kinRAB of people that defame music festivals so.