Because Lego has a monopoly, built on people not knowing the alternatives - and, in fact, the original inventor, Kiddie Craft, too - and using legal loopholes to sue anyone however possible.
Other manufacturers have long since overtook Lego in terms of quality (especially color consistency), quantity, love poured into design, licenses - while sometimes being a third of the price, but always cheaper. Including Cobi, who exclusively produce in Poland, while Lego also produces in China.
One part of Burg Blaustein/Blaustein Castle (made by BlueBrixx) would probably cost as much as the whole thing if it was made by Lego!
Military, aircraft, small cars: Cobi.
Technic: CaDa has licensed premium lines like the AMG GT One .
Models with Lighting: Fun Whole, but can near Lego pricing, with higher quality.
Kids: Buy used Lego sets, don't bother too much with lost parts, replace them on Bricklink.
And there is a few others. I listed only companies not ripping off duplicates. There is more good ones, and of course a lot of copycat companies.
AreaX has a licenced SpongeBob Krusty Krab set that's actually really well made, well packaged and the instructions are on par with Lego. I bought one from the China warehouse with its full packaging (you can order without it for a bit cheaper) and it was a total of $117.
If you handed me the pieces and told me it was Lego, I'd believe you until I saw there wasn't "LEGO" molded into the studs.
Not really - the set actually has a cool, innovative feature. I feel like it has more technic in it than any Lego set, including the so called "technic" series. So you'd feel a natural disturbance, seeing how they did not butcher the license with horrible but IP protected figures, at least two missing walls and actually even put in LEDs - which you don't have to permanently hold down on.
Are there any good price comparisons for Lego vs alternatives? I didn't look at the piece per piece price, but the non-liscensed sets seem comparable at best (~€10 for a small build).
The only things way out of proportion for Lego are licensed sets (Disney tax keeps going up) and minifigures (collectors blow a lot of money)