Straight to DVD movies: The hell is up with that?

So I saw a trailer for Scorpion King 4 and got to thinking...

Why was this movie made? Looks like Universal produced it. They're a massive production company, no? What business do they have making a movie that is only being released online?

Also, do movies ever start out with high hopes, only to hit roadblocks or shite the bed and subsequently suffer DVD, TV, or internet releases? I'm fairly certain I've see previews for movies, then realize months later that they never hit the theatres.