Here’s a place I noticed in Alton Brown’s "Feasting on Asphalt" Book, with 99 cent bratwurst, among other cheap goodies. And they’ve been doing it for years, so apparently they are making money, probably by selling lots of beer too.
Also, Rudy’s Bar on 9th Avenue and about 45 Street in Manhattan has free(!) hot dogs, all day every day. Of course, they sell lots of beer, which is the whole idea of the free hot dogs.