Increases in price signal competitors to enter the market, as demand has exceeded the current supply curve. Additonal production would shift the supply curve to the right as well, leading to a new equilibrium of both a higher total quantity sold and a lower price per unit. In the long run the assets are indifferent, so there would be no sustained economic profit. In other words, if 22LR is making a whole lot more money, then other businesses would start to make 22LR to get some of it, and the more 22LR on the shelves, the lower the price will eventually be due to price competition. That's why additional revenue now would drive down the price later, through increased supply, not souring people on expensive ammo.
Perhaps that is why prices aren't going up, the manufacturers do not want to signal competitors. Looking at ATK's annual report for last year, most of their revenue comes from government sales, and sporting as a whole was about a quarter. They also indicate that orders from the sporting section are considered a risk, as they believe the quantities exceeded true demand. With environmental and safety concerns with production, this can all add up to minimal growth, as they perhaps feel they cannot reliably anticipate future demand and hidden costs associated with expansion. They also have a considerable amount of debt already, so gambling too far with commercial ammunition may not be in the cards. But reinstatement of existing productiont capacity should help a bit.
