Because of the large lvl 2 cache. Increased cache size means decreased yield from wafers due to the increased die size and the increased failure rate all of which which means increased cost. And the PIII Xeon was made with 0.18 micron technology.
In any event, you'd be mad to attempt such a project. How much can you get a PIII Xeon for anyway?
I have prices for 700MHz P3 Xeon, €1324 with 1MB cache, €2220 with 2MB
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