Why isn’t pharma making blockbuster antibiotics?

It seems intuitive that there would be a large market for new, highly-effective antibiotics.  Doctors are warning publicly about the waning effectiveness of today’s antibiotics owing to over-prescription and increased drug resistance.

The linked article even mentions that a course of action could be to provide government incentives to the industry to make new antibiotics.  But where the market creates a profit potential, why would government incentives be necessary in the first place?

I had never heard a suitable explanation for this situation until recently, in a conversation, the following theory was advanced:  if new wonder drugs are developed, they will be “held back” by doctors seeking to establish last-line-of-defense antibiotics, and will therefore not be heavily prescribed, dramatically limiting profitability.

Does the above explanation make sense?  Is there more to the story?  Share your thoughts in the comments below.