The business model is psychological manipulation. It relies on the fact that you'll have to buy everything in-between the first and last offer. They tempt you with the last offer real cheap, and while you may be intellectually aware that there's a pretty massive catch here, your subconscious is another matter. It creates a stress in you that you'll miss out on that last great deal in order to pressure you into buying the whole package. They didn't "forget" to put the price of the middle offers in the chain there, they did it so you wouldn't think about the fact that you'll have to pay for those as well. In fact, as I'm sure they are well aware, a lot less people would buy the whole thing if it was a single pack with a single price that was exactly equal to the sum total of the chained offer, because it's always easier to ask people for a little bit and then a little bit more than it is to ask them for a lot at once.
This is hardly anything new. Part of the reason things are priced as $9.99 instead of just $10 is because your subconscious mind will perceive it as a much lower price than it actually is (another reason has to do with cash registers and employees stealing which is kind of interesting, but I digress). Sales etc. are all serving a very similar purpose. Some businesses are far more egregious when it comes to somewhat morally questionable things like that, but most everyone does it to some extent.
