Not an unusual observation.
Welcome to non-vegas gambling. The scene you describe is being repeated 100 times in new casinos, dog and horse tracks, and riverboats across the entire country. The demand doesn't seem to be slowing. I saw 4 casinos open in Kansas City, or 3 casinos within an hour of Cincinnati, etc., and saw the crowds lined up to play at full tables, I thought "in a year or two these places are going to have sucked up all the money in the area, and will have to offer $2 single deck blackjack to attract crowds". But now, 5 to 6 years later, the small regional market casinos are still turning in $10 million dollar monthly gross revenues. They are still packing the boats on weekends to play $25 - $50 min. poorly cut 6 and 8 deck shoes.
I guess the Indian casino you are talking about doesn't serve alcohol, because in the casinos in the Midwest, going out and getting drunk every night, and gambling, goes hand in hand.
The CSMs are just the tip of the iceberg for this 'gamble at any cost' crowd. They line up, and vote for, and buy lottery tickets that rake 50% off the top, take 50% of the remainder back in taxes, and then pay the remaining 1/4 off over a 20 year annuity. Look at some of the other table games that have become so popular. If you get a bad hand, you lose. If you get a good hand, and the dealer doesn't qualify, you lose. If you get a good hand, and the dealer qualifies, then you lose again, since if the dealer has qualified, then his hand is probably better than yours by definition. Oh yeah, and on each hand you get to throw away an extra $1 on a side bet, which as one old guy told me at the blackjack table last night, "I've been playing poker for 35 years, and I've never been dealt a straight flush straight up."
If you just put a slot in the wall that caused some lights to flash and bells to ring when money was put in it, but had absolutely no means to pay back any money, people would probably fight each other for the right to 'play' it next. I've seen people sit down at a table, become too impatient to sit thru the last hand and twenty second shuffle of a double deck game, and so get up and run over to an 8 deck Spanish 21 table, they are in such a hurry to lose their money. Given a choice between not playing, and playing a sucker game you can't win, the play at any cost decision wins every time.
I think the demand is not abating because, despite the recent market set back, the 90s saw an incredible amount of wealth created. Real Estate values, easy credit, 401Ks, pension funds -- and you didn't have to be a genius to tap in on it. You can get VISA cards, secured against your home equity, with $100,000 credit limits. Look at recent trends - glorified pick up trucks with camper shells, called SUVs selling for $50,000. Doesn't $200 'collectible' beanie babies simply mean that too many stupid people have too much money?
I think the 'risk adverse' Indian Casino is because the tribe doesn't actually run the casino. They usually sub-contract out the operation of the gaming to an established casino company to run it for them. This middleman increases the cost. I also think they are under a lot of pressure to deliver results. Imagine trying to explain to a group of tribal elders that the bottom line is short this month because of variance, or that you are trying to offer a good game to get better long-term results. Better to clip the suckers for as much as you can, as fast as you can, and insure the tribe doesn't replace you with another company.
I'll get off my soapbox now, I know where a good game is with 90% pen.