I studied and worked in universities for over a decade, and only ran into this sort of thing a handful of times: twice for books written by the prof, once for a book translated by the prof, once for a book written by another faculty member. There were also locally produced lab manuals, but the prices were always in line with reproduction costs. Of the two books written by the course instructor, one was into it for the money and he unkindly called me a country lawyer when I discovered that it cost money to take quizzes (which was against university policy) and the prof was a founder of the company that offered those quizzes (clear conflict of interest). The other instructor was okay with students photocopying the relevant sections of his book. Beyond that, I found that very few profs actually expected students to buy the textbook after first year. Even profs for first year courses rarely expected students to have the current edition (and the main reason why they expected students to have the textbook in first year courses was to reduce the demand created by students for additional help due to large class sizes). On top of that, I'm not convinced that upper year textbooks are all that profitable due to the low demand.

There's a lot wrong with the textbook publishing industry, but I'm afraid that some of the most common conspiracy theories just don't hold water.