I noticed the most expensive horses are all sires/stallions. Are mares not as effective as stallions or are they always being used for breeding instead?

Stallions are more because you can make more money off them when breeding. With a mare you have to wait so long between breeding. The gestation period for a horse is around 11 months. You can then breed her again in a month or so. That means one foal (possibly two) a year. With a stallion you can breed much more often and keep collecting stud fees.