Why are ethers treated as substituents and not as functional groups in IUPAC nomenclature?
The priority order for functional groups is as follows:

Radicals > Anions > Cations > Zwitterionic compounds > Acids (In the order -COOH, -COO(O)H, S-derivatives, Se-derivatives, Sulphonic acids, Phosphonic acids, etc)> Anhydrides > Esters > Acid halides > Amides > Hydrazides > Imides > Nitriles > Aldehydes > Ketones > Alcohols and Phenols > Amines > Imines > hydrazine > Phosphanes > Alkene > Alkynes > Alkanes> Ethers > peroxides >  Halo, Nitro, Nitroso, Alkoxy > Oxiranes  

Functional groups such as Ethers and Nitro-groups are way down the order and will not be the primary functional group more often than not, the reason behind them be named as substituents.

In your question, the alkane group is given priority over the ether as per the above-mentioned priority order for functional groups. Thus the name given is 2-Ethoxy-1,1-dimethylcyclohexane. 

Let's say instead of the 2 methyl groups over there, you had a nitro group, then the ether would have become the principal functional group and the nitro group being the substituent. There's no rule saying that ethers are always to be named as substituents as per my knowledge.