Providing incentives to go into primary care costs money though. It's just easier to create a situation where there are so many med school grads that a certain number are forced to accept primary care residencies they don't really want because they have no other choice.
I also feel that the other reason we have so many med schools opening these days is that these professional schools are cash cows. When there are more applicants than there are spots, some people will look at those extra applicants and realize that's tuition money they could be grabbing.
You can also look at the law school situation, where there are now so many law schools that there aren't enough jobs for the graduating lawyers, to see what this situation can lead to. Just google "law school scam" and you'll see what I mean about that.