They are expensive because they are industrial jewelry. Take a good look at one and admire the craftsmanship. There is only one manufacturer so there are doubtless some economic "rents" being harvested, too.

For tandems, they simplify immensely the task of travelling, well beyond merely saving the airlines' oversize baggage charges. It's the ability to split a bike in two (or more) pieces to move it through airports and get it into taxicabs, railway coaches (in Europe), hotel stairwells, Good Samaritan motorists who realize they can give you a lift, and into your own small car at home for that matter. It is a worth-while convenience that you can't expect to come cheap....for a tandem. Not so sure I'd bother for a single: there are just too many other options for lugging them around.

S&S restricts them to frame builders who carry liability insurance. Suppose a frame failure led to injury and both the (uninsured) builder and S&S were sued. Under joint-and-several liability, S&S would have to pay the entire damage award, even if they were found to be only 1% liable, if the frame-builder was unable to pay his 99% share. So their insurers will prohibit them from selling to a "self-insuring" frame builder. Simple as that.