Of course fabricating a chip will never be as cheap as writing a bit of software, but maybe it will eventually be as cheap as, say, injection molding a piece of plastic?
Manufacturing costs (particularly fixed costs) are going up exponentially. We're getting stuck on economics before physics. You need to be able to sell 10million+ parts to cover your costs.
There's more opportunities if you don't need the best performance or lowest power and use an older manufacturing process node like 65nm.
Once you have a mask set and fab time, it's off to the races. IMO $1M really isn't bad for a simple chip run.