Dear Bob
I do not doubt that cost played a part in PC manufacturers no longer supplying installation disks with their products but, as I worked in the computer industry at the time, let me relay to you what I know.
Microsoft announced, before 2000, that PCs were no longer going to be supplied with installation disks but instead the installation routine would be held on a hidden partition on the HD. To install windows on a newly purchased PC the manufacturer would supply a 1.44mb 3.5 inch diskette that would have the necessary programs on it to boot from, access the hidden partition and install windows on your PC.
In 2001 I bought an XP Home PC. which I needed urgently, from a big Computer retailer (never again) and apart from a range of built in limitation it was as described above.
Finally, remember that all manufacturers stopped supplying installation disks at approximately the same time, this would not be logistically possible unless a powerful player was pulling the strings.
UK Bob