Many of the airports in Hawaii are unable to support larger aircraft and currently are only serviced by Caravans. This makes service unreliable because in the US single engine aircraft essentially cannot fly IMC unless the visibility ad ceiling is such that they can break out of the clouds and be within gliding distance to shore. This poses a problem at a number of airports.
Additionally there is poor road infrastructure to and from the towns serviced so air travel is the only practical means of transportation. The loads don't warrant a Q400 or even an ATR-42 so a 19-seat aircraft like a DHC-6 is the only sensible option. Currently none service these airports due to their atrocious acquisition price. DHC-8 aircraft service a number of the rural communities but can barely pull a 50% load factor. Pricing must be kept low so the airlines operate a slow loss, only supplemented by tourist destinations where they can charge more during peak travel months.
This is a scene repeated all over the world, in Canada, Alaska, South America, Africa, Asia, and Oceania. Just because a 19-seat or 30-seat airliner doesn't make sense from London to Frankfurt or Chicago to Cleveland doesn't mean there is no market for other models. The number of DHC-6, DHC-8-100 and BE-1900 aircraft in service speak to the need for many air carriers to produce a 30-40 seat airliner with equivalent operating costs.
Getting the best CASM isn't always the most practical assessment of an aircraft. If you can only fill 40% of your Q400 maybe it isn't the aircraft for that market.