If you haven't worked in the government it can be hard to appreciate how many rules there are around procurement and how complex and sometimes crazy they are. At one project I worked on we used Red Hat enterprise Linux because the rules prohibited "freeware" and Red Hat was nice enough to charge us money for the CDs the operating system came on. It was going on a classified machine so taking advantage of the features that differentiated it from the free Fedora version was out of the question but rules are rules. But generally the rules that applied to me working at an FFRDC were much less burdensome than some of those my friends who have worked at defense contractors have had to deal with.
All of which is to say that while it's absurd for a trash can to have a price of $50,000, we can't be sure that this doesn't actually reflect changes in the actual cost structure of providing it. The rules are different for providing commercial off the shelf (COTS) goods versus specially procured goods. There are a lot of rules and regulations that would apply to the later but not the former. What if the old version was made in Mexico, for instance? Then you might have to go to a US company and get them to analyze the old version to figure out what composition the plastic is, create new molds to the exact specifications as the old shape, and have your new parts certified as identical to the old parts while being produced 100% in the US by US people.
Which isn't to say that defense or other contractors can't be huge sleazeballs who try to gouge the government sometimes. And sometimes this is outright corruption like the time that one guy in the DoD who was leaving for a job at LabView soon said another group where I worked was going to have to redo our work in LabView and we should get in bed with a corporation too. But this was on a recorded meeting so we were able to get that decision reversed. But often the way it works is that defense contractors working on cost-plus contracts do their best to interpret regulations in such a way as to maximize their costs so that they maximize their profits.
Preventing outright corruption like with the LabView guy is really important but the complicated rules we write to try to prevent that sometimes end up producing requirements documents that let a defense contractor claim with a straight face that the $47,000 they spent producing the trash was all legally mandated expenses and then they get to sell it to the government for $52,000 and pocket the standard 10% of the $5,000 difference.
I don't have a good solution for how to fix this in defense specifically, but Alon Levy's work on why transit costs are ten times larger in the US than in Spain or Italy seems like a good starting point. Or I'm currently reading ReCoding America which promises to give some insight on government software porcurement.