Sure, but all depends on how much you've got spend.
I own a few watches, and my collection includes a very simple Casio.
I love that watch, it's cheap, durable, the battery lasts forever and it tells the time certainly more precisely than any mechanical watch. It's quite the bargain at 20 bucks.
I don't care that much about how it's made. When I spend 2K on a watch though, I tend to care.
With that said, you could argue that, since it's not functionally better than my 20$ Casio, the 2K watch has to justify its cost by some more subjective aspects, and you'd be right.
2K watch are Veblein goods, made to satisfy their owner with something else than logic and objectivity. Is that crap ? It's up to you to decide, I won't try to argue on that.
What I don't understand though, is your very last statement.
The law that fixes price on a niche-of-a-niche market like ours, is how bad the customer wants something. Not how much it costs to produce.
Take Grado for example. Look a their high-end line, the GS/PS1000i/e/x/y/z's. Do they look like they're expensive to build ? Not to me, yet they cost a fortune. Why ? People are willing to buy them at that price.
Another example : the mighty HD800. Their drivers might cost a lot to produce (and they have to cut the R&D costs, too) but what's around does not. Yet, again, they're very expensive.
Should we boycott them ? "Come on, sennheiser, stop the ******** and bring us some good and cheap cans "! ... "But, Sir, we have the HD650 ?".
My point is : most hi-fi brands will not price their products based only on what they cost to build, but on how much their customers are willing to shell out for them.
Those customers won't change anything the lower-end products. Grado still makes SR60's and Senn still makes HD650's.
The problem in this hobby of ours are not those guys. The problem comes from the average summit-fi head-fi'ers who think 1K cans are cheap because they do 90% percent of what 2K cans do.
This state of mind caused the relentless increase in price we've seen over the last few years.
The problem also comes from the beats guys, who were convinced that 300$ were socially acceptable and screwed the whole market.
R10's and L3000's have nothing to do with it.
Some people buy a watch because of craftmanship and that each individual part of the watch was sung a lullaby by the watchmaker. Other people buy a watch because they need to tell the time.
I buy headphones for sound not craftmanship and I don't care what materials the headphone is made of. Whether they were churned out of a factory at hundreds of units per hour or took weeks to assemble by a single person is irrelevant to me. Though you could argue that presentation and materials will affect you psychoacoustically i.e. something that feels premium will be perceived to sound better than something that doesn't feel premium.
Besides, I'd rather have mass-produced flagship headphones that are cheaper to make and cheaper to buy. People that want to spend more to be in some kind of exclusive club make it worse for everyone else.
