From the engineering and manufacturing perspective while the part cost goes up with higher quality DACs the engineering cost goes up much faster. It isn’t simply a matter of choosing “a better quality” part, it is a mater of choosing one that sounds better and synergistic with the other components… so one would evaluate a dozen different kinds of one part… say resistor. Every iteration of the design must be broken in and compared sonically with other versions. This is why a new DAC will literally take more than a year to design by highly skilled engineers (only those that have the skills to design, but also to hear nuanced differences in sound and the patience to work towards a very specific outcome.
In the inexpensive DAC arena, one can go to a parts supplier or contract manufacturer in China and say, I’d like you to build me a DAC… they will give you a standard design for free… you choose the color, the insignia, and if you would like any parts upgrade packages. Then they will make them for you. This is how we get such cheap electronics. I have been to most of these contract manufacturers in China.
Then as far as is the sound worth it. That is entirely a value judgement on an individual basis, and also subject to listening skills and experience. Audiophiles value better sound. Better sound at higher levels is more and more about nuances and consistency across the entire audio spectrum. I, as most audiophiles appreciate better sound as each aspect gets better… it approaches the real thing at the macro and micro level.
Most normal people think anyone is crazy and wasting their money for buying separates of any kind and would not do it. For them, they have the right level of investment and sound quality. I have always worked endlessly to get the very best sound for the absolutely maximum budget I could afford. It makes me very happy. I am very happy and satisfied with my current system: average component cost at $20K. If I could afford it I would take a couple years and upgrade my system to $40K average component cost and my system would sound significantly (and well worth the investment to me) and make me even happier. Arguing that there is one “right” investment level for everyone or there is an absolute “right” is simply wrong and quite honestly just egotistical.