Reality is that more than 99 percent of US meat production facilities are factory farms.

A lot of “economic sense” depends on where you draw the boundaries of your externalities.

If you exclude environmental impact, basic human rights, animal welfare, and social stability, a lot of really short-sighted and destructive setups suddenly start to make “economic sense”.

You technically don’t need them if people would consume reasonable amount of animal products, which they don’t. In the actual real world we all live in the vast majority of meat comes from factory farms whose entire existence relies on feed crops and antibiotics abuse.

And feed crops are often from questionable origins.

It apparently does make short-term economic sense because we use 6 million km^2 of cropland to feed our animals instead of us directly.

https://ourworldindata.org/global-land-for-agriculture

It does not make sense long-term, but the long-term bill will be paid by someone else, so people today don't care.