Why have the palouse hills become the state’s wheat-growing region?

The fact that the Palouse hills exist at all is somewhat of a miracle. During the last several ice ages, glaciers advancing south from Canada ground up the bedrock as they passed over it, creating a fine rock dust known as glacier flour. The glacial flour washed out from the glaciers and accumulated in Glacial Lake Missoula (see The Channeled Scablands chapter). The Missoula Floods washed over eastern Washington and created several huge but temporary lakes. These lakes eventually drained and left behind monumental quantities of silt. Prevailing winds from the south west blew in the silt and dust to where it settled out into hills of loess that look like giant sand dunes. 

The answer is price.