$20 billion comes up under $100 per person per year in the US. Even giving it a generous x4 multiplier to account for the people subsidizing the industry without being consumers, at $400 per year, given the $3 and $7 prices by parent, you would need to eat under 100 pounds of meat for meat replacements to be viable. The average American allegedly consumes close to 200 pounds of meat[0] per year, so it ends up still being quote economical.
You're making the incorrect assumption that vegetarians are replacing whatever meat they were eating with the more-expensive meat substitutes. As I noted in my comment above, there are plenty of meat substitutes and alternatives that are much cheaper than $7/lb.
The US is fixing that problem. Starting December 2016, a vet must examine and prescribe antibiotics for each animal; it will no longer be allowable to preemptively dose an entire herd just to enhance production.
[0] http://www.ers.usda.gov/data-products/food-availability-(per...