Earlier quoted context omitted.
eInk displays aren’t cheap, then add in the pencil layer, cpu, etc
Yes, but it is not $500 expensive. LCD wasn't cheap but got 10 times cheaper in 15 years. eInk is around more than that yet still super expensive.
You also seem to be making the mistake that products should be priced according to their raw manufacturing costs. Not only is that ignoring engineering, marketing, legal, licensing and other costs, it’s also ignoring profit and trying to recoup investment on an initial product which itself is risky without knowing how well it will sell.