If few other people save it, then nobody will develop treatments using it, since a treatment is only developed if it makes financial sense, and if <1% of potential patients for a treatment have cord blood banked, then a treatment that requires their personal cord blood will never be developed.
There are many companies doing this now and many (affluent) parents are saving it. I think your analysis misses the mark, even if there's a niche market, if it's comprised of people willing to spend lots of money, it can make sense as a business.
