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“I believe motorcycle fans love to follow the racing to see the advances in motorcycle technology, not just to witness the battles between riders on the track.” Nakamoto.
I suppose that's why so many people prefer to watch the Moto2 and Moto3 races, because of the superior "advances in motorcycle technology" in those classes rather than simply to witness amazing battles between riders, the like of which we haven't seen in MotoGP for a very long time.
As for providing the engines for Moto2 without making a profit, I'm sure HRC consider that preferable to having to compete with Kawasaki, Yamaha or Suzuki powered bikes as they're guaranteed to win every race.