They COULD be doing it because most folks when they want a red are either making their own, or looking elsewhere, since the Pulsar is virtually worthless without an external lense, or voiding the warranty by doing a focus mod !!!
Dunno if anyone will agree with me, but between the goggles, cap set, and dragon case extras, I think the price is actually pretty fair. Sure, you can pull a diode out of a DVD player and overpower it in your own DIY setup, but we're talking about a ready built, sleek, solid laser that you put two batteries in and go. IMO that in iteself adds a lot of value, and with the cap set you get your burning too.
The only issue I continue to have is with the lack of a good driver, but I can probably think of a complaint for every laser out there.