US
I've thought about this quite a bit (MP's in the US) and I honestly can't figure it out.
Here's the facts:
In any US city, you'll pay twice what you'll pay in Toronto. Additionally, the 'extras' you get in Toronto aren't even available most of the time in the US. If they are, expect to fork over SERIOUS cash for it.
The attitude is terrible, too. It's extremely rare to find a girl who really cares about how much you enjoyed your time - most of them offer a in-and-out, thanks-a-lot, move-over-cause-the-next-guy's-here type service. Very unappealing overall.
You're right - the demand is there, but the supply is not. I can't believe that LE is a major problem over here. It doesn't matter whether you are in the US or Canada, exchanging sex for money is illegal. Yet it goes on all the time in Canada, and I'm stuck waiting in line at customs when I feel the urge.
When somebody figures it out, please PM me.