Captive market - people who want the highest quality portable sound are always going to want to tick the size/sound/battery boxes even if the price is incomprehensibly ridiculous (which it is). I'm looking for a new DAP myself and really struggling to make a choice, the perfect unit doesn't seem to exist. The one most people seem to like (from reading so many posts I've lost count) overall is the AK240, which is overpriced. I'd be surprised if the manufacturing cost is even a 5th of the retail, struggling to find a place I could demo one to see if it's true or not.
I wanted to try out the ZX1 to see if all the 'low volume' claims would be a problem with my Denons which are aimed at being portable friendly. The local Sony store closed down several years ago though.