Nothing at all "dumb" about your question.
As for your guesses....It's a damn good bit of both. Bandwidth is a considerable expense for the vast majority of small to medium sized independent IR stations, especially if you're not in a position to buy kilobits in massive quantities or "purloin" by having generous friends in lofty places. Unlike terrestrial radio, the more ears you have...the more it costs. Simplified-- 1,000 listeners @ 64kbps costs half as much as 1,000 listeners @ 128kbps. Jump to 320k...well it's just math and adds up quick on the cost to benefit ratio for the station.
Think of it as a water/sewer bill. The more concurrent listeners...the bigger outbound pipe you need to serve your audience as a whole. Now then, how much of your audience is brushing their teeth
(connected via DAC and nice amp) vs. how many are washing their car or flushing their toilet?
(stand alone mobile or cheesy external speakers)
It's a fine line science balancing the bandwidth books for most. As a general rule,
nearly all stations have very little "play" money left over after paying their most significant expense....the royalty bill. So they're compelled to serve 1,000@64 vs. 200@320.
That said and to your second guess, there are some legitimate DSP tweaks stations can do to "enhance" a low bitrate stream. This
can work remarkably well in the hands of an experienced internet radio guy. Unfortunately a great deal of these attempts are done by novices and only make matters worse.