Most of the cost is in the memory, display, etc., that doesn't affect the "sound". With modern electronics, good sound is cheap & easy. The $10
Apple Dongle got an excellent review. There are DAPs & headphone amplifiers with more power (louder). But more power for a headphone amp doesn't cost the manufacturer much either* We are usually talking about less than 1 Watt... With power amplifiers (for speakers) you can get 1 Watt or more per-dollar.
There are overhead costs that tend to make DAPs more expensive than more mass-produced products.
My marketing professor used to say,
"When in doubt, raise the price". Consumers tend to associate higher price with higher quality and of course it boosts the profit margin. And, especially in the "audiophile community", a higher price tends to increase demand (or "desire").
All of those words are typical-meaningless "audiophile nonsense".

They can mean almost anything and the reviewers that use this kind or terminology almost never do blind listening tests or back-up what they
think they are hearing with measurements. With electronics there are ONLY 3 characteristics of "sound quality" - Frequency response, noise, and distortion. With a DAP or DAC, they are all usually better than human hearing. With speakers, headphones, or in-ears, there are frequency response variations, and when you add room acoustics it gets more complicated. See
Audiophoolery for the REAL characteristics of sound quality.
* With a USB powered device, the 5V power supply limits how much power you can get out of it.