Risk. Outsourcing all the manufacturing process has several a lot of uncertainty that they need to start figuring out. By the time they decide to manufacture their flagship chips, all the uncertainty will be already in the past lowering a lot the risk. It is better to screw it up with low-end, cheaper chips, than with the ones that represents the brand (high-end)

Also vanity. It's a bad look if Intel's top-end chips aren't made by Intel.

I think i3 is mid-range. Low-end would be Pentium and Celeron.