Economics is one of the subjects that I've taken to study in college (in India), and it is unsurprisingly full of Keynesians. The faculty has no idea about the Austrian school, and the only remotely similarly reference to it was just one sentence: "Hayek said socialism does not work, but that is incorrect." When I pressed the point, I was given the usual mumble about "Capitalists EAT BABIES!!" How did it get to this stage?
I'm going with physics envy and rent-seeking
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
We see the same sort of conflict of interest for other subjects as well. The government and other interests have manipulated the education system to further the interest of the state and its interested parties. It would then not be suprising that a state education system would teach economics that encouraged the state. Same sort of aspect when we have a science syllabus teaching such silly things as co2 is a poisonous gas and carbon credit markets. I heard from someone at school on an internet forum, that they learnt about carbon credits in class.
Oh, I'm sure they would like Lord Keynes in Indian academic circles. Indian college professors are stereotypically the biggest Anglophiles on the planet, subconsciously longing for the days of the Raj, when mustachioed English fruitcakes like Lord Keynes would have actually been on hand to dispense their pearls of wisdom, centrally planning and spending everyone into Nirvana.
In fairness, it's not very different elsewhere. The Established intelligentsia is always anathema to the sordid marketplace. A very interesting read in this regard is The Anti-Capitalist Mentality by L. von Mises.
http://mises.org/etexts/mises/anticap.asp
That's a more academic look. But if you want the barebones answer, it's basically because the statists needed a (seemingly) "scientific" excuse to proceed with their statist policies that furthered their elitist agenda. Tom DiLorenzo gave a talk at the Mises Circle in Houston yesterday about "Why the Constitution Had to Be Destroyed" that covers the same concept, but from the political angle. It should be up at the Mises TV archive soon, but the gist of it was, for the nationalists to further their Hamiltonian agenda of basically recreating the British monarchy here in the States, the Constitution needed to effectively be destroyed.
It's the same thing with economics...for the elitist agenda to be furthered, there needs to be a "scientific" (read: plausible...at least in the eyes of the general public) explanation for why their wealth needed to be siphened away from them. And given enough time, and enough control over the education of the people, it is not hard to convince them of anything...no matter how ridiculous. (North Koreans literally believed their dear leader was a super-human being. One refugee explained in an interview that until he escaped the country, he didn't think the dear leader even urinated.)
This is what has happened in our own education system. Of course it's nowhere near the same degree, but it's the same concept. I went into this a bit here.
Mainly politics.
I blame it on these elements:
1. A failure of, and confusion over methodology
2. Various political developements including political socialization
3. The failure of free market economists
The first is by far the most important. with a misunderstanding of proper economic theory static views of the economy and of human behavior emerged. This meant that empirical evidence could be utterly abused and that mathematical models could be used in order to describe human behavior. This, more than anything else, lead to the failure of the system because it made fallacious ideas look not only possible, but true.
The second frames the debate. People have various presuppositions built into them through their upbringings and early courses and so on, these assumptions frame the way they see the economy in the first place.
The final ties in directly with the second, which is that in the past the free market economists were unable to put up strong enough arguments to prevent statist ideas from taking hold. This is especially true in macroeconomic theory, which lead to the Keynesian takeover.