Why are 7.1 pre amps more $$ than 7.1 receivers?

For example, I could buy a Denon 3311 surround sound receiver with massive connectivity (PC networking, Pandora, etc) for about $1100 (once it actually hits the market this summer) Assuming I already own a nice McIntosh multichannel power amp - I can't seem to find any pre amp 7.1 surround processors anywhere near that price range. Even used, the processor wont have HDMI and ethernet, etc. Any ideas? Why would one buy a 3 or 4 K pre amp processor when a $1100 receiver has more connectivity, etc.
There's more to life than connectivity. ;-)

Well, there are Onkyo and Integra prepros that approach that price used plus the Integra 40.1 has an MSRP of $1200.

But, to answer your title question (which has been asked many times), the reason is the relatively small size of the prepro market making the unit costs higher for each additional SKU. In addition, the separates market is more "upscale" and the manufacturers' offerings reflect that.

Is there some type of significant sound or video advantage to using for example a $1200 Integra processer as opposed to as $1200 receiver from Denon and just use the pre-outs on the Denon to hook up my McIntosh mutlichannel amp. I would just be using the latest Denon as a pre amp processor
In theory, no difference. In specific, I do not know how any 2 items would compare until I compared them.

I wonder if anyone really cares :-))
Kind of an apples to oranges comparison, in most cases. In addition to KR's comments, I would point out that the prepro section of a Denon 3311 is not in same league as, say, an Anthem prepro. Nevertheless, there have been examples that defy your maxim in the past. For example, I own a Sherwood-Newcastle P-965 pre-pro. When last available, it retailed for $1500 (street price lower). The receiver version of this prepro was priced at $2000, and was identical save the addition of a 7-channel amplifer. There are a few low cost alternatives that seem to offer full, modern feature sets at low prices. These are mostly from direct mail sellers, such as Outlaw Audio and Emotive Audio. The advantage to buying direct is that these sellers usually offer a return window, so you can audition the preopro in your room, with your gear, and see if it's for you or not. Although the Outlaw is OEM'd from Sherwood, I haven't heard the current model, so I can't speak directly as to its sound quality, but, for the money, I've always found the Sherwood prepro to be very musical, if a bit short on soundstage dimensionality and transparency.

Depending on how important stereo music is to you, vs. surround sound for films, you might consider aiming for something like what I have, which combines a 2-channel system for music with a surround system for films. I am not too fusy about soundtrack reproduction, so I have focused more time and money on the 2-channel chain than the surround chain.

One would hope that a dedicated prepro would out-perform the prepro section of a budget-friendly AVR, but, as KR says, there are economies of scale to consider that benefit some manufacturers more than others. In the case of Sherwood, which OEMs for many other mid-fi companies, there is a benefit. Others, not so much. But Kal is right, you gotta listen. I was rather surprised that my Sherwood was better sonically than the then current entry-level prepro from Rotel. The Rotel was good, but in my home, in direct comparison, the Sherwood, which has a bigger feature set, sounded significantly better, IMHO.

Keeping up with the latest features can be difficult. Especially if you want 3-D compatible connectivity!
Thanks bondmanp - alot of useful insight - to me connectivity to PC is important, but the 3D stuff is totally meaningless. I'm not intrested. I guess I want the most recent surround processor with PC connectivity and latest HDMI, less any 3D stuff.

I'm still having a hard time justifying buying anything else than the Denon 3311 when it hits the market this summer. Great connectivity and I think Denon makes a resectable processor for surround to use it as a surround processor with preouts to my 6 channel McIntosh amp.

Any other suggestions? I will look into Outlaw and Emotive for sure