You could also argue that the "red" categories align more closely with "needs" people have little to no choice but to pay, and are ripe for predatory pricing. It's true there are monopoly problems here, but the answer isn't to remove regulation it's to strengthen it. A return to real anti-trust in particular. The blue items lean more towards luxury items and discretionary spending, so pricing can't be so exploitative…
Even the American Enterprise Institute, where he's getting the chart from, frames it more in terms of globalization, competition, and of course given the source, regulation. Their preferred talking points on it are a little dubious as well: e.g., cars are subject to substantial regulation on all sorts of axes and yet are flat and therefore "blue" on the chart, while college textbooks aren't really meaningfully regula…
Further irony: the open and free textbooks (and textbook alternatives, and increasingly efficient distribution of second hand textbooks) are probably one of the main drivers of the price rises. Publishers sell to tiny niches with a significant core market who find it really important to have the latest edition of the course text, and fringe around that that now has much cheaper alternatives. There's no mass market potential from pricing really low, so the publishers try to offset the loss of sales to the second group by squeezing the first group for higher prices. In any case, textbook revenues are already in decline despite the price rises.