Question on a basic principle

[Nick Brubaker]

The 2017 Cost vs. Value Data (http://www.remodeling.hw.net/cost-vs-value/2017/) shows that aside from the installation of attic insulation for no other home improvement project are the costs invested able to be recouped upon the sale of a property.  An average of maybe 65% of the cost is able to be recouped in most cases.  This is a basic principle that I am confused about.  If it is the case that money invested into a house through renovations, additions, etc. is not recouped fully or more in a sale than how do flips or any kind of renovation pre-sale (aside from insulation) make sense.  Why would I put $60k into a new bathroom if it only adds $30k of value to the house (https://www.nari.org/assets/1/28/Remodeling_Impact...)?  Similarly, all other factors excluded, would this mean that if I bought a house for $200k and decided I needed an additional bedroom it would make more sense to sell the house and buy a different house for $260k with the additional bedroom than spend $120k to add the bedroom to the house I already own?  

Have I been misguided in assuming that flips and renovations are possible because the costs invested plus an additional margin/profit are to be expected upon sale?  I get the idea that if renovations that you desire are done on a house you live in long before you plan to sell it you are able to enjoy the improvements for a period, which makes up for the inability to recoup the costs fully on a sale.  However, why does it make sense to do work to a house before selling it?  Or why does it make sense to buy a house that needs work with the expectation that you would pay for renovations afterward when the returns in actual value/equity are not comparable?

Does this make sense?  What am I missing here?