in short it is because there is no demand for altcoins.
[...]
I wouldn't go so far as to say that there's
no demand for alt coins. But there's definitely no demand for almost 99.9% of them -- literally.
In my opinion some of the alts would be able to stand on their own, but get swept away with the rest of the market whenever something bad -- or good -- happens. Alts with strong communities that may even include people that never touched BTC at all, beyond transferring between exchanges. They are the ones that sometimes manage to decouple from the rest of the market for longer durations than just the occasional pump and dump; If only for a limited time.
For the most part I agree with your statement though -- the vast majority of alts are purely utilized as means to increase Bitcoin holdings (or fiat, for that matter). Even the stronger alts are for a large part used for what amounts to leveraged Bitcoin trading, hence the strong correlation between Bitcoin and alt price movement.