Unfortunately, there is greater demand for virgin paper and manufacturers of virgin paper products are able to take advantage of economies of scale and pass on lower costs to the consumer.
Also, there is generally more processing involved in bringing to market recycled paper for consumer use. Brands like Seventh Generation with high post-consumer content require collecting / sorting through recovered office waste paper, newsprint etc. These are labor and time intensive processes. Once the scrap paper has been sorted, it then needs to be de-inked before it can be formed into finished product.
In spite of all this, Seventh Generation recently introduced improvements on paper towels and lowered retail pricing on bath tissue to make our products more competitive with conventional brands.