I am a graphic designer, specializing in tshirts for the last 10 years I think I can shed a little light on this for you.
Fist off I can only guess without looking at the file but here goes. This is probably a 1 color front, 2 color back. They had to pay a lot for that full front pallet so I am guessing they wouldn't be paying for 3 of them.
That one color image was probably output at 50 lpi and put on a high mesh screen.
Lastly, and this is a really common trick, that is probably a photo of a kid in a black shirt with the art file blended to the photo in pshop. This is pretty easy to do, most of the big catalogs do it all the time. That will make the image look better on your monitor that it probably does in real life.