I think part of the issue is that most students entering pharmacy aren't really aware of the options post-graduation until they're well into it. I know I hadn't even realized residencies were a thing despite looking into pharmacy in general. So when you are already 2 years into pharmacy school and decide you don't want to work retail, it is not like you can just say "well medical school is better then." You are already 2 years in and would lose another at minimum applying, plus you have the loans from at least 2 years of professional school. So that is when students say "Well I better do a residency then." So if the PGY3 is added, people will do them because they don't want to do retail and they didn't realize the commitment to get out of retail before starting.
[/Q