I am pretty sure we very quickly in this discussion jumped from "what the state of the industry is" to "what the state of the industry ought to be", a very common debate failure point. I am just telling you what the case is. When you say you don't believe me, you don't present an argument that demolishes my case and says why I am wrong, you are just telling me that the industry is not doing what it could be doing. But what you originally asked me is "I mean, I'm interested to know. I peer review for a few journals and I never make a dime, so where does all the money go?"

I told you exactly where the money goes. You are entitled to an opinion that it's a bad way to spend the money, and that's fine. I happen to think that it's a suboptimal way to spend the money as well. But your question of "where does all the money go?" has been answered properly.

The act of peer review is a relevant source of cost because at least at some publishers, the cost of shepherding a paper through peer review (not the actual peer review, but the process of peer review management - the costs of which I've already broken down elsewhere in the thread, and they are measured in hundreds of dollars of employee time) is borne by the publisher, not by the unpaid editors or the unpaid reviewers.