UPDATE : thank philmoz for the posting below ....
With SD cards dirt cheap, why compress RAW files?
Specmanship ? People buying entry level DSLR's are typically not experienced photographers. So if Brand-C can fit 2000 image on an SD card and Brand-N can only fit 1600 images on that card then clearly Brand-C must be better.
Also, I think you will find the images from those processed and compressed RAW files are a lot better than pure RAW files if you don't plan to post-process those files.
Its is not a conspiracy but just like AMD and intel disable some cores in a chip in order to fit them in the price range the same way camera makers are compressing RAW files to cripple a camera in order for it not to compete with their more expensive models.
I disagree. If Canon could out sell Nikon by providing a better entry level DSLR they would. Their more expensive models typically have much better lenses and sensors and a whole pile of other features including build quality. They protect nothing by providing compressed RAW - its a trivial difference compared to the other differences. Go into a camera store and spend 15 minutes with an entry camera vs a high end one ( and I don't mean Walmart).
And AMD and Intel play the game with disabling cores in the chip as a way of managing yields. When a chip comes off the line, those parts of the wafer that have defects in one core get downgraded to be lesser spec chips. Simple economics.
Almost half of the data is thrown away, you can find this out by seeing the compression options that higher-end models provide.
Again, higher-end models have better sensors and lenses. So the raw data from those cameras is actually usable as it comes off the sensor. The cheaper models need a lot of post-processing to get good results. And from what I've read on this forum, very few people actually have the photoshop skills to match the quality of the processing that even the cheapest Canon P&S provides.
But hey - if you still think real RAW is something you must have from a $500 DSLR then feel free to start and lead the project. If nothing else, you will probably have a lot of fun with it !