The attitude that the cost gap between products in the same category will not be accounted for elsewhere in the user experience or product quality.

tl;dr : you get what you pay for.

Cost gap? You mean, the ColorHug being more expensive than the other alternatives which work better?

Ok, but I'm not sure how that explains it. You'll need to go into more detail.

As with most Open Hardware projects, you pay extra for the mere fact of the device's existence. Without paying extra, it wouldn't exist, because producing stuff in small amounts is way more expensive per device than producing them in high volumes.