You think they're overpriced, but I bet you no one is getting (very) rich off these $400 DACs. Even more, I think many of them profit so little every once in a while a company pivots or goes out of business.
An Audi also has just a couple thousand of extra love worth of physical cost added to it, but the retail price is easily upwards of $20.000 above the equivalent VW car. That's because if you sell fewer units, the r&d and marketing costs per unit are much higher, as well as the required profit per car sold.
If you get a good deal on your hardware, you might have that good DAC in a nice box with a pretty manual for $50 physical costs, then put it on a prime shelf in a nice Hi-Fi store for $130 (30% of $400), maybe $50 to target and prime your customer, and then use $150 to pay your audio engineer, your CEO, maybe outsource the rest of the company infrastructure, and then 8% interest to your lenders. That's 1.7M profit at 10.000 units sold (assuming that you do all of this within a year).
I have no idea if 10.000 units is close to reasonable for an indie hardware startup, but calculations become a little more complex if we're going to have to take a multi year ramp up in account..
edit: Sorry I got caught up a little in the startup aspect of it. Your system sounds great, but your DAC (and DSP+crossover system) also cost $400, so you're not making a point?