Hard to say without knowing their inventory levels and sales numbers. If they're sitting on a pile of inventory and need cash it doesn't matter what their costs were.

It's also possible they significantly reduced their costs in the past couple of years in anticipation of impending competition and have been collecting higher than normal margins while they wait for Garmin to figure out how to make a powermeter. This recent price adjustment may be bringing their margins back to their normal, sustainable levels.

Personally, I think buying two PowerTaps for roughly the same price as a set of Garmin pedals is a better deal but we'll see what others think.