It's not a matter of "dabbling" or "sanity", it's a matter of making a niche product that takes a lot of very qualified people years of work. The market for individual consumers that would buy Mathematica is tiny. You might as well wonder why SAP don't "dabble" with a "sane" price point for R/3 for home users to balance their chequebooks.

I'm not completely convinced. I'd love to use Mathematica for modeling some of the stuff that we're doing, but no way I'm going to drop $4000 on it (the price where I live). $500 and I'd do it immediately.

"Shockingly rich professors of mathematics" - a harshly vertical niche, no wonder the per-unit price is high. But I think they've painted themselves into a bit of an unnecessary corner. Mathematica is a universal workhorse and math has huge applicability. I think they could cut the per-unit price and make it up on volume, selling into commerce and academia. Heck, I'd be inclined to offer "open source user" licenses free for private individuals who agreed to CC license their results and their code libraries.

Who makes more money, Toyota or Rolls Royce?

"Who makes more money, Toyota or Rolls Royce?"

I'd leave off the automotive comparison. Porsche is rich enough to contemplate buying Volkswagen.

I expect, like Oracle, almost all users of Mathematica are on their institution or employer's site licence.

There's plenty of cheap maths software (e.g. MathCad) and free (e.g. Sage, Octave) around.

researchers work in universities, almost all of which have site-wide licenses. Site-wide licenses for mathematica also start to approach reason. Its doubtful that that many researchers will have to pirate it.

Universities in a lot of countries do not have budgets that can deal with even $1000 a seat.

I can confirm this. We have a site-wide license for Matlab, but not for Mathematica. Educational version of Mathematica 7 would cost me my two monthly salaries - therefore I will pirate it.

I didn't buy any, but from my point of view, Mathematica is priced just a bit lower than Matlab.

Matlab quotes me $1900 for a single common license: http://www.mathworks.com/store/loginSubmitGuest.do while Mathematica is $1750: http://store.wolfram.com/view/app/mathematica/

How much does site license for Matlab cost you?

I got Matlab student version 4 years ago for around $140.

A site license is a lot. My dept can't afford it and use Maple instead.