Like others have said, it probably has to do with shorter runs/lower overhead/more profit, but I wonder if part of it is also that there seems to be less separation between West End/off West End in London (since often times both are considered for Oliviers etc) so they may prefer the intimacy of smaller houses and don't see it as any loss in prestige? (I think the smallest official West End theater is also quite a bit smaller than the smallest Broadway theater.)