How and why did the PC industry come to have such a low average profitability?

A variety of factors.
Commoditization - All computers were more or less the same. Meaning, they all performed similarly. Anyone could buy Intel processors and stick them in a plastic case and call it a PC. The name brand became irrelevant. These clone computers that people were purchasing were known as "White Boxes" because they were of no particular brand.
Direct to Consumer Sales - The model pioneered by Dell of selling directly to consumers also helped drive prices down. Since there was no need for expensive middlemen, retail stores, or distribution networks, consumers were able to buy the computers directly from the manufacturer at what would have been considered a wholesale price by the large, established manufacturers.
Open Architecture - When IBM lost its stranglehold on the design and development of PC architecture, that was the beginning of the end. I remember when they were still selling computers that were MCA (Micro Channel Architecture). This meant you had to buy add on boards (like LAN cards and Video Cards) that were designed for MCA computers. Everyone else was using a different standard (gosh, its been so long, I forget what it was called, PCI I think). So, since everyone else was using the open standard, that helped loosen IBM's grip on PC design and architecture. That meant that IBM no longer set the standards and no longer had the pricing power associated with that position in the market

A flooded market and ferocious competition.

The profitability is in the software and services sector. Ask Bill.

no.1 competition. no.2 supply n demand. supply always exceed demand today.

EASY answer,competition