It's the same reason I didn't fund Ouya - I didn't see anyone on the team who has actually successfully shipped a hardware product. It's the same reason I did fund Pebble, because they have, albeit on a much smaller scale.
This shit is hard, and people need to realize this.
People think it's easy because it's simple on the small scale. There's nothing I know of that's harder to scale than manufacturing operations.
You are completely right, it is hard, sure the part is only worth $1, but you still have put in months going back and forth with vendors getting that part because they cut a corner or misunderstood what you wanted regardless of how clear you tried to be. Then you need to deal with them on a production scale.
How true. Inefficiencies add up quickly when you multiply many times.
Think about stuffing envelopes by hand. If you need to do 10 no big deal you can fit it into any open time period. If you need to do 10,000 you need a machine or much more labor. (Same with scanning by the way try to do volume scanning with a scan snap you'll get burried).
That was my first experience with a manufacturer where I got to see what it was that making 100 changed vs making 20. In our case it was mostly all of the various parts that came from different places, so you needed to stage a bunch of things and that difference in delivery times meant that to build a 100 reliably for some components you were holding on to stock of like 500 of other things. That tied up a tremendous amount of money, and the risk was if something went wrong you might have parts to make 80% of 500 things but not the same 80%! It was maddening, and very complex. We had a gal whose job it was was to talk to suppliers basically all day every day and help get things 'kitted'.