Nearly all of Lego's patents have expired across the world, and as of today it is perfectly legal for companies to release competing products that are compatible with Lego's interlocking brick system.
There are many manufacturers releasing compatible bricks, most famous of which (at least in the west) is Mega Brands, a Canadian company, known for MegaBloks and Mega Construx. More recently quite a few Chinese companies have popped up such as Lepin and Oxford.
Today, most of Lego's legal battles involve companies stealing the designs of Lego sets (as in, the full set design, brick for brick) and re-releasing them, the primary culprit being Lepin. Oxford primarilly release their own designs and therefore are left alone.
Your quality arguments do hold some merit though, as the design process of both the set and element design that Lego goes through is unmatched. However at least in the quality department, Chinese brands are coming close. They however have the benefit of Lego doing all the design for them in the first place.
EDIT:
Sources: https://boingboing.net/2005/11/17/judge-to-lego-your-p.html https://www.independent.co.uk/news/business/news/lego-loses-... http://curia.europa.eu/juris/liste.jsf?language=en&num=C-48/... https://www.nytimes.com/2005/02/02/business/worldbusiness/bu...
https://en.wikipedia.org/wiki/Hilary_Fisher_Page
They bought the company later in an attempt to whitewash all this sordid history.
I understand Lego seems expensive and that might have something to do with the sticker price dictated by the appeal the blocks have to the buyers and also quality control the company has in place to make sure everything is durable and fits perfectly. I have 30 year old blocks and new ones and everything snaps together predictably and tightly. I also haven't noticed any of the bricks get brittle over time. I fully expect my grandchildren to keep playing with the blocks I played with as a child.
The fact that blocks are getting constant use over many, many years makes them actually very cheap compared to other toys that frequently get broken in hours or days and get quickly forgotten. My kids 3 and 5 spend large part of their time playing Lego which makes me not regret the hefty price of the blocks.
The sticker price is bad way of deciding whether the toy is cheap or expensive. Is $1000 toy that will be constant source of enjoyment and creative education over many years (and possibly your grandchildren) an expensive one compared to $30 toy that will offer no educational value, will only make loud repetitive noises and get broken in couple of hours and quickly forgotten? I don't think so.
There are other formats of blocks that are much cheaper and do not purport to be Lego-interchangeable. Just use those if you are concerned with costs.