What you have to remember, which has been touched upon above, is that there is a significant development cost involved with hifi, as well as the refining. Let's take an example.
Manufacturer A spends £100,000 on R&D and expects to sell 100,000 units. Therefore his R&D costs per unit is £1 (ie something like a Sony DVD player)
Manufacturer B spends £100,000 on R&D but only expects to sell 500 units. Therefore his R&D costs per unit is £200 (ie something high end)
Then of course you have materials costs, which will be higher naturally for the high-end kit, then you have the lack of economies of scale to buy these components as a supplier will give a far better rate when you are buying 100k of anything rather than 500.
Then you have manpower, someone still has to man the Customer Service, and with high-end you get better service (usually), again this has a cost. You still have a CEO, and MD, a sales force blah blah blah.
Then of course there is marketing...
Let's assume that a page ad in a hifi mag is £5,000, that works out at 5p per unit for manufacturer A (plus production costs), but works out at £10 per unit for manufacturer B. Let's then assume that the campaign is to run in 5 magazines and 2 insertions in eacg mag ie 10 times. That's 50p per unit for the A, or £100 per unit for the B.
There are many more factors involved but I think this illustration shows just why prices shoot up as volumes of kit sold reduce. Unfortunately when buying high-end kit this means that the costs are much higher.
It's the same in any market though, take watches as an example...a Rolex isn't 100 times as good as a Timex.