Like all low-end printers, they are sold at a loss on the printer on the hope that you will then come back and spend ridiculously high amounts of money for replacement cartridges.
That's what I thought when I saw the printer price, but when you go to the cartridges section, they're no more expensive than the ones I buy for my Lexmark. In fact they're slightly cheaper if you buy the bulk package of cartridges with the 5% discount.
Maybe the 720 is about to be discontinued and they've got stuck with a load of them. If I didn't have an all in one printer/scanner/photocopier I may have been interested.