And there you have it. Honda builds the Insight -- and has always built the Insight -- as a showcase car: a technology platform to wrap marketing, engineering reputation and future-model sales around (read: Civic and Accord Hybrid, possibly the new hybrid NS-X rumored to be under development). Honda's always thinking about the future, folks, and the Insight was meant to be a taste of what the motoring future could bring (and what Honda believed it would bring) to the high-volume consumer market.
This is the same reason large motor companies get involved in racing. Hundreds of millions in R&D and testing is spent by any big maker to race competitive cars in a major series. For F1, which Honda nearly dominated until about three years ago, the outlay is probably in the billions. Why? To develop new technologies, yes, but the big reason is to win races, which has always been the best marketing tool an automaker can have. With the Insight, Honda has won two races: to sell the first hybrid car in the U.S., and to have the most fuel-efficient car in the U.S. Honda will try it's darndest to keep the latter distinction until it believes it's not important anymore.
The motorcycle I own is another example of this: the VFR. My 2002 model has VTEC (the first production motorcycle to have variable valve actuation) and a number of other state-of-the-art goodies. The V4 engine was a revolutionary race engine when it was first developed. Now the VFR is a sport-tourer and one of the most technologically advanced bikes on the road. But only about 1,000 are sold in the U.S. every year. Why does Honda still sell it? As a display platform (the next VFR is rumored to have a derivation of the V5 enging currently used in MotoGP, the world's top bike-racing circuit) and because they still sell well in Europe, where motorcycling is both much more popular and more accepted (ditto diesel engines in cars, until the new EC emissions standards go into effect in 2007. Diesel cars will largely die out after that).
Honda isn't making money with the Insight. Now. It will in the years to come with the second-, third- and fourth-generation hybrids to come.