What makes a high $$$ cartridge high $$$?

From what I can tell, not through my own experience yet, there is consensus that going up the price ladder with cartridges pays performance dividends. The range of prices is pretty wide and I am curious what is the central issue in driving cart prices. Is it research and development technology, materials, production costs, market dynamics (luxury pricing), brand value extraction, etc. Maybe it is the same as with amps, speakers, etc., but somehow carts seem different.

Where does the price/performance curve start to flatten $500, $1K, $2K ?
Greed! Soon the Chinese will enter the market with knock off's of the classic cartridges. When double blind tests are conducted, anything above $500 tends to be beat by the under $500 price point. Experience, like fifty years of it in the hi end, confirms there is no collation between price and better sound. A last point, set up and the arm tend to rule. I've heard $3K cartridges improperly set up by 'experts' and still the owner raved how better it sounded, until the set up was corrected.
Depends on the other components in your system.

However, as with automobiles, wine, etc. etc. you'll always pay the highest price for that last 1%-5% of performance/quality/enjoyment/resolution.
Another factor is the baby boomer generation. Many of us (I was born in 1958) are hugely nostalgic about our vinyl and there are millions of us. Also, we're at or near the peak of our earning potential so we can afford $5-50k turntables and $1-10k cartridges, just for beginners. The industry loves us about now.
I must say, I went from a $450 cartridge to a $1500 one and there is no mistaking the improvement. Even my wife hears it! And thats saying something!
Tiger, what happened after the setup was corrected, did they not like it so much? I'm not sure what you mean.
And let's not forget that the US Dollar's plunge into the s**t-house will drive up the price of many renowned EU & Japanese cartridges, as well as audio gear from the above mentioned regions, in addition to Canada and Australia.

You don't get out of debt by issuing more credit...but politicians will destroy our economic tomorrow, for votes today!!!!
I went from a $500 cart to a $900 cart to a $1200 cart to a $2300 cart using the same table, arm and set-up device. I found improvements in each scenario that made the pruchase worth it.

Of course, some prices just seem to be playing into what Kmulkey has mentioned.
The very expensive cartridges are like the very best of anything- hand made by a master who understands how attention to fine detail and the use of the very best materials does make as difference. Audiophiles with high resolution systems and a discerning ear do hear the difference and are willing to pay the price. Thus we have products like Koetsu and others. It is not snake oil nor greed.
Tiger- That double blind testing you mentioned...is that the blind leading the blind? :)