An AC on Slashdot, so take with a grain of salt:

Do you want to know why the government continues with it even though [security measures don’t] work? It’s because insurance rates for airports and airlines would go through the roof if we didn’t have this in place. [..] Our lives are governed by actuarial tables.

I hadn't ever thought about this, but I wouldn't be surprised if it were true. Certainly the airlines themselves have a business interest in not have these carcinogenic full body scanners and sexual harassment, because they discourage people from traveling.

For the record, security theater was a term coined by my hero Bruce Schneier to describe security measures that are entirely for show, without any benefit.