Because they make more money that way, as people that would have normally only bought one or two songs have to buy the whole album instead...
Basically they long ago proved to the record company that only a few songs on their albums are songs people will buy, so letting them buy only those songs means they will no longer buy the album.
Actually they proved that the record company makes more money off of an album than a single song, which makes sense with physical formats. Say it costs 75 cents each to make a pressing run of albums, and 25 cents each to make a pressing run of single (45 rpm) records. The albums will sell for more per unit than the singles do, for about the same costs of a pressing run, higher cost per unit is amortized into higher profit per unit. With this thinking, it is almost stupid to press more singles than you need for radio airplay.
For downloaded music, the cost is measure per byte of storage and bandwidth. Your costs are the creation costs (what's paid to the musician, recording studio,gig/studio musicians, managers, record companies, lawyers), hardware costs (server, harddrives, power, server farm HVAC, paying some network guy to be handy), and bandwidth. Creating by the album will save you money by reducing amount of paperwork to handle, but making the music easy to buy legally is where you MAKE the money.[/QUOTE]
Actually, the record companies don't have to pay any of the hardware or bandwidth costs, the provider (IE iTunes, Amazon, Napster, etc...) pay for all that.
