Wow. At that cost, I assume American banks must be using a combination of telegraphs and the Pony Express to settle their wire transfers.

"You see, sending money across state lines is not easy. There needs to be insurance in case wild natives attack and steal the leather bag containing those money orders... It's only fair that we pass that cost on to the customer."

You're joking, but when I did a wire transfer it failed the first time and I had to call my bank and give them extra information over the phone, including the street address of the branch where the destination account lives. Considering how much labor went into it, I understand why they charged me $30.

Nothing is completely secure. Giving out Credit/Debit card numbers on a website can lead to theft too. Giving out bank account numbers can to. In both cases consumer is indemnified as along as they flag the transaction within 60 days. The problem is the hassle of dealing with the banks etc.

I know it isn't bad if you know the person is at the same bank, for example most of my friends bank at Chase so we can transfer money via wire for free.

Right, I personally use Chase's "QuickPay" feature a lot. I would imagine that most people don't think of that as a 'wire transfer' though.