When one understands that there were almost no roads (ways to get one's product to market) during those periods one begins to understand why moonshine was profitable: it was a more monetarily dense product than the wheat that went into it. One of the major developments in the early days of the United States was its travel and communications infrastructure, including turnpikes and canals. Once those developed and it became more cost effective to ship farm commodities like wheat and barley, moonshine production dropped. Turns out that bread is kind of important. ;)

A modern-day analogy is the opium trade in Afghanistan. I had a good friend who was a retired Air Force Colonel stationed in Afghanistan for some time. He gave a lecture to a large group of us - including pictures - showing that the major trade there is opium because it is lightweight and can be loaded on the backs of goats for transport/export. When all you have is knife-edged mountains everywhere and no roads - let alone vehicles - you use what you have...