Can Someone Explain to Me Why ...

For sure supply and demand has a lot to do with it, but in the case of the 8800GTS 640MB of DDR3 memory is expensive to begin with.

I dont think the duopoly in the market helps. Also the market they are aiming for seems willing to pay the high prices. They have created an asperational luxary product.

I'm surprised that a manufacturer has not released a product that allows smaller incremental upgrades to performance. A lot of the market is young and this would allow them to drip income from them. Hooking up two cards is to large an investment for most. $50 chunks would be easier to swallow.

it also depends on where you shop at too... ...prices can range anywhere from under $50 for a dedicated (albeit outdated) gpu... to anywhere between ~$100 to over $600+... ...just like with top cpus (among other performance related parts); the increase in performance, isnt always worth the increase in price... ...if a component doesnt have any real competition, its prices are bound to stay inflated in most cases, because there is nothing really driving the prices of them down at all (though there are other factors affecting pricing too)... and in the case right now of the 8800GTX/GTS, they have no real competition as of right now, so their prices are inflated as such (supply/demand/new product/new features/competition/etc)... ...same with the intel QX6700

but, this is also where you would take the best bang for the buck into account, definetly

There is no real competition. There are only AMD and Nvidia. And as it stands AMD won´t start a price war on Nvidia since they can´t afford it money wise and because they still depend on Nvidia for chipsets. Nvidias position right now is quite good and i would say it comes close to a monopoly.

yeah... it wouldnt be good for amd to compete heavily with nvidia on the graphics front, at least right now anyhow (finance wise amd still has other markets too where theyre profitable i believe)... they should be able to compete with nvidia though after not too long, when they get their inhouse platform ready for release, motherboard, gpu, and all... but right now is not a great time though to compete

though there are other motherboard chipset providers other than nvidia, that could offer chipset support to amd, i believe anyhow

Realistically top of the line GPUs go for about the same as new console systems and do pretty much the same thing, allow you to play video games at a very high level. I don't agree that it's necessarily a matter of lack of competition, but rather just that ~$400 - ~$600 is the going rate for the technology required to play state of the art video games.