I would not say that it is extremely cheap. The cost of your post depends on the law firm used, whether you directly hire the Chinese law firm or you use an intermediary, etc. Moreover, does the USD1000 figure of your post include the translation into Chinese? It is usually not cheap.
Then you have to add all the prosecution costs, plus grant costs. The cost will go up pretty quickly. It is not just a matter of how much does it cost to file a Chinese patent application, it is the cost for the entire thing: filing, prosecution, grant.
Not filing in China could be a strategical decision because you do not see a potential market there for your invention, you foresee little competitor activity, you do not have the resources for getting a Chinese patent, or you do not have the resources for monitoring activity of Chinese third parties to detect infringement and for filing a lawsuit in case of infringement.
You could monetize your Chinese patent by selling it or licensing it, but many companies do not have a business unit for that kind of activity or they prefer to spend their money in their main activity.