One person's "price gouging" is another person's 'business decision'. The problem is when you are in a limited market like these trains you don't have the alternatives you do with other products. If you don't like Lionel's pricing but like MTH's, you can buy MTH, but they may not have what you want or you might feel it isn't as good as the Lionel product (guys, these are all hypothetical scenarios, I literally have no dog in the fight). You can buy something used, if it exists, and hope that it works properly. Obviously you can do what some do and run only PW stuff conventionally, too.
Put it this way, just using tv's as an example of a mass produced good. You decide Sony TV's are overpriced (which they generally are IMO), and there are a raft of other brands you can buy, including no name brands. Those are mass produced products that make their money on volume. You have real alternatives there and the differences between them is minimal....
I don't have any inside knowledge of Lionel, but I have some pretty good guesses what goes on there. Besides having some brand loyalty, including people who hate MTH, they are also operated differently. They are owned/have been owner by private equity and those folks among other things demand high returns, they aren't satisfied by like 7,8%, they want double digit. To do that in a relatively small market the margins have to be high.
So then why is MTH lower priced? I can only guess, but MTH was pretty much a sole proprietorship of Mike W (it could be he has minority owners, I don't know). As such he may have been happy with normal margins since he doesn't have wall street to worry about *shrug*. I can tell you from case studies galore over the years, that private companies tend to spend more money on R and D and willing to take lower returns then in public companies or those owned by equity groups and the like (public companies are in total return ie return on money in the form of dividends and the like and the more important rise in stock price).
Thing is a lot of people grumble about the prices but pay it, and that is their right, the same way Lionel can charge what they want. As far as 'bringing it home', until things like shipping and labor rates and the like make it disadvantageous to build there, it isn't coming back to the US, and if it did prices would definitely not be lower (I know it is 2 different issues, but some seem to think it would be cheaper making it here.). If the market were bigger, if they ever really serialize 3D printing into a mass production kind of thing, it potentially could come to the US, but it would be a highly automated factory with few workers (not to mention the cost of tooling such a factory would mean it would be lionel contracting with a contract factory that produced a lot of things, like they kind of do in China). I doubt it would bring down the cost, though, for a number or reasons.
