Technology does advance, but not as fast as you'd think. Audio reproduction technology has been around for over a hundred years, and the shrinking transistor count of today's computers doesn't help it one bit. In some ways, some kinds of audio hardware made 10 years, 20 years, or sometimes even older, can possibly be superior to today's stuff due to craftmanship and materials quality.
Mostly any advances in headphones today are due to computer aided tweaking of well established designs, and technological advances in the materials available to craft headphones from. If that sounds expensive, well, it is. See the Sennheiser HD-800 and Beyerdynamic Tesla T1 for examples of "clear upgrades of existing products" due to expensive materials and thousands upon thousands of man-hours in design and testing.
As for the Beats and Bose, yes they are mostly marketing. To be sure they ARE better than the $5 iphone earbuds on the rack en masse at wal-mart, but a large part of the price of those headphones is to make up for the marketing involved with them. You think Dr Dre's name comes cheap? You think full page ads in magazines like Time, People, etc isn't expensive? I'd guess that if those cans you're looking at had a random Chinese manufacturer name on them instead of Bose or Monster, they'd cost about 1/3 to 1/4 of what they're currently retailing for. For $50, bose headphones aren't horrible. They're not great, but not horrible. For $220 though, they're a horrible set of headphones. You can do so much more, like an amp and a set of Sennheiser HD555s or Alessandro MS1s... or you could get a set of Beyerdynamic DT-880s and start saving for the amp.
Look at it this way. A pair of Air Jordans costs Nike a few dollars to make (the guys on the assembly line in Malaysia are making about 15 cents an hour), yet they sell them for $80. Where did that extra $75 come from? Marketing and promotion. Same thing with Headphones. It's the reason that you've probably never heard of AKG or Grado before coming here, and only barely heard of Sennheiser.