Why Is Hi Fi Gear So Darn Expensive?

...Because there are stupid people with stupid money.  It's as simple as that.

I think you could ask this question in many different industries. Why is this kitchen faucet $5000 and this one $500 or this one $100. Why is this shirt $1200 and this one $200 and this one $20? There is generally a curve on actually quality, materials and style but at a certain point it’s really just about whether you want to spend the money or not. Some companies pride themselves on being handmade. Some just survive under the umbrella of their brand. Is Louis Vuitton’s leather really that much better? There will always be insanely expensive and probably overpriced pieces of gear because there can be and people will pay. 

P.T. Barnum was right.  "There's a sucker born every minute."

You can build the Linkwitz LX521 system for as little as $6000, and it will stand up against the $50,000+ systems all day.  You could easily drop $100,000 and more and get sound not as good as the LX521.   If you haven't got the courage to do the project yourself, there is a company that will sell you the full system, fully built and ready to run, at about $20,000.

This is a full system that includes amplification because it is multiamplified and uses an active crossover.

The LX521 is not hard to build.  Madisound sells flat pack kits, and there's nothing to stop you from having a local cabinet maker do up a custom set for you at a reasonable price.  Any competent cabinet maker could knock them out in a day or so.

More than any other hobby I can think of, audiophiles seem to associate quality with seemingly outlandish prices.  I don't deny there is a general relationship between price and quality, but it is inconsistent and certainly way out of proportion at times.  

I also truly believe many (but certainly not all) vendors take advantage of this fact and as a result make the hobby very confusing.  I know Ohm has been mentioned by several in this thread and I absolutely put them in the category of providing good value and not taking advantage of this trend, so good on them as well as other vendors who provide tremendous value.  

Some time ago, a Swiss watchmaker had about 20 prototypes of his new $400,000 watch and he went to the seaside and boarded one yacht after another. You know the kind, like you'd see at a Formula 1 race, all lined up with revelers and partiers doing their thing. 

It didn't take long before he was out of watches with enough commitments to buy that he didn't have to worry about work for awhile, of if they'd sell.

The kind of people who'd buy expensive audio gear live a different world than anyone here (I'd dare say) and would find these types of conversations both quaint, and sad, making them feel all the more fortunate and privileged, if they even cared.

All the best,
Nonoise