There are more reasons why recumbent bicycles are not seen as much as they could be. First and foremost though, is the vicious cycle* that recumbents have had to suffer since 1933 (as mentioned in vomsorb's writeup). If you can't race with them, they won't be as popular with the general public (Don't deny it, just look at the proliferation of Nike shoes among people who only wear them to the milk bar, and think about all the people with a racing bicycle that hardly ever gets ridden (I remember in one Seinfeld episode that Jerry mentioned his bike (that hangs in the background near the entrance to the bathroom) was 'just for show')). If something is not manufactured as much, there'll be less of them, they'll get less exposure, and less people will want them. So on and so on until all recumbent bikes are pretty much made for and by enthusiasts.

The lack of racing credibility isn't the only hurdle the recumbent bike has had to deal with - the fact is, that when you're riding one you look like an absolute idiot. You lean back with your feet out front like you're on a recliner, yet you're probably wearing bicycle shorts and pedalling like a mad thing. To boot, the steering is underneath where you sit, making you look like you're performing some sort of bizarre arse surgery on yourself. The short wheelbase ones are even worse - the pedals are higher than where you sit, and your feet stick out over and in front of the front wheel! If you want a bicycle for everyday use, get a mountain bike, if you want one that looks cool, get a lowrider or a dragster. If you want to look like the bicycling equivalent of a trainspotter, get a recumbent bicycle.

Safety is also an issue with recumbent bikes. For many people, riding a bicycle means riding it on a road at some point - conventional bicycles put your head above the roof level of most cars (Again, four wheel drives make things unsafe for another category of road users), enabling you to see well and keep your head and torso away from the initial point of impact in the event of a collision. Recumbent bikes have you very low to the ground, heavily limiting your visibility and also putting your entire body somewhere around the level of the bumper bar. Safe!

Finally, recumbent bicycles are expensive. There is virtually no mass-production of recumbent bikes, so each one is either part of a small production run, or made one at a time. This drives the prices up.

*Seriously, I didn't realise this until I re-read the entire paragraph.