If you're talking about the US, you're glossing over a couple of really important points. The USPS is required to provide universal service. I'm sure providing service to NYC and SF is extremely profitable, and providing service to rural Iowa where the cows outnumber the humans 100:1 isn't. USPS doesn't get to pick and choose.

FedEx and UPS do... and in fact in those rural communities often uses the USPS for last mile service.