Part of that it is due to depressed pricing. There has been little motivation to sell corn at a loss and prices never reached an attractive point. This year due to Katrina, transportation become an issue so "old" corn never moved. With old crop still in the bin, new crop had to go somewhere.
You are right that it would definitely be more cost effective to burn than to watch it go to waste in piles. It varies on size of the pile and location etc, but it not unheard of to have 10% shrinkage(term for lost grain for whatever reason), on outdoor piles.