Interestingly enough SSDs have already outpaced the density of HDDs in the 2.5" form factor, presumably due to exactly the effect you describe. You literally can't buy a 2.5" hard drive bigger than 2 TB last time I checked. All of the thin-and-light stuff like ultrabooks is SSD only too, HDDs can't even match the dimensions you can do with NVMe (maybe something like Microdrive could) let alone capacity.

Cost is still up there but only about 2.5x as expensive as 2.5" HDDs... a 2 TB HDD is about $80 while a 1 TB SSD is ~$100-120. And there are (kinda shitty) 2 TB SSDs that are hitting $250 these days (eg Micron 1100).