OR!! (puts devils advocates hat on).
Or they're not as mad/weird/propped up by welfare as you think they are.
Perhaps these low prices are "loss-leaders", maybe they're getting people in with a marquee low price with the intention of gaining a repeat customer who they can then "upsell" other services to.
I'm not an expert in nail pricing (we run an extensionists with a posh-bird clientele, price isn't a MASSIVE issue for us, quality is) - but this kind of pricing policy isn't that unusual in the service industry.
There's a difference between people naively trying to undercut people and then giving a crap service (they'll be out of business in 12 months, I see this all the time in the design industry where someone with a copy of Photoshop is suddenly a graphic designer) and people trying a clever (and proven) sales technique.
Just a thought anyway