Lipow points out that grass-fed cattle actually produce about the same amount of food per acre as feedlot cattle (once you factor in all the corn and grain needed to feed the latter). Grass-fed cattle use a fraction of the fossil fuel energy that feedlot cattle do. It's a more sustainable farming technique. And on the whole, it costs less. So why are feedlots so popular?
The obvious answer is that government policies favor the existing large feedlot ranchers. Obscene farm subsidies make corn and soy exceedingly cheap—and hence, lower the costs of feedlots. Large ranchers tend to have a good thing going, and see no reason to mess with it; instead it's easier just to lobby for regulations that favor large industrial farms. This is partly what Michael Pollan was alluding to in his fab New York Times Magazine piece on the madness of Congress' annual farm bill. Fiddling with that wouldn't solve all the world's problems, but it'd be a nice start.
In other words, it's not so much our eating habits that have us consuming vast herds of cows raised on feedlots, but deliberate legislative efforts on the part of Congress. This is actually quite encouraging as we are more likely to change Congressional policy than we are our desire for cheap and tasty hamburgers anytime soon.