Why they sell for less, I can only make some guesses based upon what I've been told in my looking at them.
It's true a few, but not all, do have smaller rear ends than bovine and that would tend to affect it some, but mostly I think it has to do with two things. The first is the grade of the meat. Beefalo is high protien, LOW fat, low cholesterol meat. In my opinion, it's not going to grade high enough for the average feed lot buyer to want to fool with them. They'd need to sell them to a specialty place that deals in "healthier" cuts of meat in order to come out. I don't think it'd be worth their hassle on a few animals they would encounter to find the market. The second reason I think is just plain the unknown. They aren't all that common and I feel most people don't know how they'd do in given situation and tend to shy away from them for that reason. I also think there's lots of misconceptions about them floating about.
I also know from talking to the breeders that they sell most of their stock as freezer beef locally. The ones I've talked to that ran them thru a barn just kept their mouths shut about the bison content. You may legally sell Beefalo as beef and not declare the bison content, but not vise-versa.
As far as them being hard to breed, that's not what the breeders say or any of the info I've read says. But bear in mind that's being said by the people trying to sell the breeding stock and I wouldn't discount off hand any thing that was seen first hand that was contrary. There were major problems with fertility at first, but after they got the bison content down fertility improved. Beefalo is between between 35.16% and 37.5% bison. It's possible that the neighbors herd has a higher bison content, but's that only a guess since I've never actually had any, it could be that their marketing propaganda is just garbage.
If you want more info here's a couple of very good sites about them.
http://www.ababeefalo.org/
http://www.beefalobeef.com/
I'll stick with regular commercial cattle. Guess I'm a chicken, but I like the established market and the known product. Hard enough to make a profit without venturing that far into the unknown. But then I guess the person I know that had 60 Emu's and couldn't sell them probably has made me more cautious.
Good luck