They can.  The problem is that doing so would open the tobacco companies up to a whole host of lawsuits.  Acknowledging that the nicotine level can be manipulated leaves them vulnerable from two points; they have long claimed that nicotine is not the reason that people use their product (it's all about flavor), and producing a lowered nicotine product would leave them open to suits for not doing so sooner (deliberately failing to make a "safer" product).  Also, keep in mind that the real market for tobacco is now in Asia, and there is little to no incentive to reduce nicotine levels there.  Asian smokers haven't begun dying or taxing their nations' health care systems enough to create a backlash against tobacco such as we have in America.  That will probably not happen for another twenty or thirty years.