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An excellent question!
There are 4 main reasons:
1. On average, It's what our play testers suggested when we surveyed them before launch.
2. Kind Words 1 was too inexpensive to effectively promote with discounts. Steam sales get attention. We couldn't put big discounts on KW1, because it was already so low, that we wouldn't be covering server costs if we went too low.
For KW2 we've already had multiple discount periods where it's 50% off. Everybody gets KW2 cheaper and we get to take advantage of the increased store visibility from Steam sales. Win/win!
3. There's a perpetual moderation burden but no subscription fee.
Kind Words requires time from human moderators everyday. Think about almost every other live-service game you know. They either have a subscription model or consumable in-game purchases to generate constant revenue. Kind Words has neither of those. With Kind Words (1 and 2) you pay once and you get unlimited, permanent access to a live game that is constantly being up kept.
4. It's much bigger than KW1. There's more than 4 times to do in KW2! We've invented so many new ways to interact with other people and they're all VERY active! (Which means they all require moderation).
To add it all up, Kind Words 2 includes a full remaster of KW1 and It's part of an automatic bundle if you own both games (another $2) off and it's regularly on sale for 50% off.
The patient, price-sensitive player who doesn't have KW1 is gonna get KW2 for $10 easily (which includes a remaster of KW1 inside it!). If you already have KW1, you'll find it for ~$8.
The KW1 fan or someone who just knows they'll love it may pay $20 and that's what really helps us keep the servers and the moderation team going.
Thanks for asking!