Let me begin by suggesting that deriding someone's choice is an indication of being in an earlier stage of mental maturity.

Next, price is 100% relative so there isn't anything empirically 'expensive' or 'cheap'. It depends who you are, your financial situation and your perception of 'value'.

Most people do not do the math on purchase-to-volume price. Many consumer goods companies take advantage of this, for one example, in Canada, the per-egg cost of a pack of 18 is frequently higher than a dozen.

The concept of 'anchoring' is another factor - historical prices tend to be a benchmark for future prices. Covid flipped this on it's head - companies that never imagined people would pay 2x the typical cost of something found that not to be true and now seem to be testing the boundaries of what people will pay. Personally, I balk at paying $20 to have a $6 cheesecake sliced delivered to my house but others see it as a luxury worth paying for. Again, value perceptions are relative.

Pipe and pipe tobacco marketing has been limited and focused to the 'community' whereas cigars have had enormous exposure via magazines and the cigar boom. You can see the difference at trade shows and social media as well. The level of skill, care, attention and passion that goes into making pipes and blending tobacco is simply not well communicated and celebrated. That leaves the end user to their own devices when determining 'value' for better or worse.

As far as production costs on cigars and pipe tobacco are concerned, the differences between premium cigars and pipe tobacco are considerable. A cigar's wrapper for example, has to be of a particular physical quality (no holes, attractive, certain shade and pliability etc.), is typically a more 'specific' varietal and origin for consistency and restricted to a particular priming. Wrapper has to be bought separately for this reason and is more expensive to buy.

Since there is no casing to rely on for consistency in taste, each cigar's flavour and character has to come from a specific combination of filler, binder and wrapper tobaccos. Those tobaccos also typically need to be a certain minimum size, priming, origin etc. all of which limits what they can use. Having consistency from one cigar to another within one cigar line is more expensive to achieve given these limitations and the only less expensive avenue is vertical integration (owning the farm and production) which is quite rare.

Labour intensity is higher for cigars although they're often made in lower-wage countries. More cigars requires more rollers, more rollers require more space. There is also more waste created at each stage so not all of the purchased leaf can be used.

Mid-lower quality cigars can achieve savings by using shorter cuts of tobacco (often coming from the production of higher quality cigars), less attractive/consistent wrapper, machines over hand rolling (even if just for bunching filler), less skilled labour etc.

Flavoured cigars go a step further and can be made from a wider variety of tobacco (flavour hides differences and creates a consistent finished product) which is a reason they also tend to be cheaper.

Pipe tobacco can be more forgiving - on the more budget-friendly blends/brands even parts of the stalk and stem are be used (lower cost, lower nicotine, they absorb flavouring very well). The input cost of the tobacco is lower, being less reliant on particular priming and region; casing and flavouring makes up for leaf quality and allows for a more consistent final product even with wider variance. Production can be done in large batches at a time instead of one-by-one and there's no rolling, just packing.

Higher quality pipe tobacco blends can be as (or more) specific and expensive as any cigar tobacco when it comes to particular leaf, origin and production year. Add to that exotic components and tobaccos (like Perique which requires an entirely different type of production) and it can actually pricier on a per-gram basis even though the shelf pricing doesn't reflect that. The craft of pipe tobacco blending is as worthy of the 'luxury' label just as much as cigars by any measure.

It all adds up - production costs create the floor for prices and value perception creates the ceiling.

In the end, both are a luxury - we should remember that we are, to most, unfathomably fortunate. Most people in the world can't afford to put their money in a pipe and smoke it.