The problem with increasing APR is it's easy to increase, but it should be hard to decrease it. So at 10% we're pretty good. It's not too absurd, it's in the double digits but only just.
Also, offering interest on HBD is meant to increase demand, not increase market supply. Especially now that it pays only to savings. As @nicniezgrublem said, the mechanism to increase supply is baked in to the new HF and is instant.