I suspect DRM or patents for rent seekers are involved somehow. Or maybe they're playing on the naivety of the business community towards this stuff. I'd sure like to know, and also if there are any low-cost or open source KVMs available.
For any high-bandwidth thing like HDMI, you need to do clock recovery and copy over the bitstream at the very least. You can't just use relays or whatever. Doing this at 10gbps+ is going to cost a bit.
The computers would see the HDMI cable/USB cords unplugging and re-plugging.
Obviously this can be problematic, but I can't see it being that expensive.
a) the display will flip out and spend multiple seconds re-syncing itself, and
b) the sources may take actions such as resizing the desktop, switching to the internal display, pausing the game, whatever.
Part of the point of a hardware KVM is that it negotiates its own connection to all of the devices involved, and only changes which signals are passed through at any given moment, resulting in instantaneous switchovers.
Now, a multi-input monitor can also do this, but then you have to deal with whatever compat issues are involved in commanding it to switch over DDC (see for example https://github.com/haimgel/display-switch), and it typically also won't be as fast as a hardware solution since input switching speed isn't a metric most people care about when monitor shopping.
It has like... 4? different physical layers running at different speeds and all sorts of other weirdness.
Of course then Windows gets confused by the lack of monitor and rearranges all the windows, so it's not a perfect solution.
If you look up the prices of stand alone hdmi switches on amazon though I think the most likely explanation is these are now niche products so the price has gone up. Logically a decent vga USB KVM + an HDMI switch shouldn't require more cost than those two devices prices together.
Some of the reviews suggest it acts as a pretty brain dead switch, which may cause problems with the OS. I know for a while I had a Windows 10 PC's monitor on a remote switch for silly reasons. I had to make sure to lock the PC before the monitor would turn off, otherwise some combination of driver/os/whatever would treat the disappearance of the monitor as a resolution change, and all my windows would get squished into 640x480. I could see KVMs like this triggering the same sort of madness.
Logitech has a keyboard that perfectly connects to 3 devices (unifying and/or BT) but they don't have a mouse that follows the keyboard and their mouse oriented work-arounds for that are garbage.
I dunno, I started thinking of it like switching from one game server to another, if you (somehow) do it in the middle of a game, stuff is bound to explode.
Who has 2 computers? People who can afford them.