Actually I suspect that there would be healthy sales of such a vehicle, it's just that the financials work out poorly. There is just a certain minimum cost for the design and manufacture of a vehicle, and the price of such a vehicle gets too close to larger better equipped vehicles. (The TATA Nano has this problem in India--for just a bit more you get a much better car.) In the US the Nissan Versa is the cheapest car but for a bit more you can get a lot more car.
It's a slice of the market that automakers rather just leave alone.