It isn't unusual for contractors to specialize. The windows and doors is an odd add-on to the bath business, but the folks who remodeled my kitchen don't do other remodeling nor did most of the other contractors we looked at for the job. The people that I'm probably going to hire do replace my roof and siding don't do interiors. It's not a viable business model in an area with limited demand, but it works fine where the market can support it. Their website says that they operate out of 40 locations, have done tens of thousands of jobs, and won numerous awards, so the model is clearly working for them. I'm not sure what doesn't make sense about any of it; it actually seems quite reasonable.
As for your question on what happens if they can't pay, the name comes off the field and the school starts taking offers for a replacement. It has already happened.