I don't really think an LGA1155 Core i5 setup is all that out-of-line with pricing, given that a Core 2 Quad with a decent motherboard cost at least $50 more overall five years ago.
That said, prices could be more competitive if AMD could regain their Athlon/Athlon XP/Athlon 64 glory days again. They really stuck it to Intel back then as they were fumbling around with the NetBurst/Pentium 4 architecture, and I recall prices in the $800-1,000 range for the Athlon 64 FX CPUs because they knew they had Intel soundly beat.
But ever since their attempt at countering Core 2 with Phenom, they just can't catch up. Phenom II was a decent effort, but Intel still had a lead, and now AMD's latest can't even consistently outperform the older Phenom IIs. It's like Pentium 4 Northwood vs. Prescott all over again!