I don't know where the idea comes from that a kit would make engines affordable. Even at 10% (which was what I saw with the Lionel and AF examples), a 1200 buck engine would be 1080, it won't make a 600 buck engine 200, it won't make a 1200 buck engine 400. From what I remember of kits by people like Mantua and Bowser, they weren't that much cheaper than RTR. The reason kits were common in the 'old days' was about the nature of the market, the hobby was small, and one thing about kits is you are basically building it with minimal warranty or support, you really are liable only if something is missing or broken, and support might be phone support , other than that you were kind of on your own buying them.
My take on Mantua and Bowser and Athearn offering kits was there was enough of the old guard who wanted to build their own were around to make it profitable to offer them (this is when I was a kid, back in the 70's), but it never really was about making it that cheaper. One other thing to keep in mind is that those old AF and Lionel engines were pretty simple, they don't have futzy details, detailed drive gear on a steam engine, they didn't have sophisticated electronics, with modern engines with CC, it would be a lot more difficult (I put together HO engine kits, they had an open frame motor and no electronics, about the only wiring outside the contact pickups for ground and + dc, was a a light).
Menards is a unique thing, they are producing really cool stuff, but if you note their business model they aren't producing engines, their freight cars are like the old post war semi scale equipment, and their buildings are not at the level craftsmen products would be (and that is not a criticism, I love their buildings, my only lament is they don't produce the sauerkraut factory any more, gonna have to find that when the time is right). Plus Menards as others point out is not primarily a train maker, which is great for all of us
. The point isn't about Menards, rather that you can't compare what they sell to something like a scale engine with all the bells and whistles (now if Menards can produce scale engines with all the bells and whistles for an affordable price, that would be a feat, that would be making an omelette without eggs.
