Cost(n) = search_space(n) * $8 / search_space(16)
And search_space(x) = 2^x so
Cost(n) = 2^n * $2^3 / 2^16 = $2^(n - 13)
Cost(32) = $2^(32 - 13) = $524288 Cost(64) = $2^(64 - 13) = $2251799813685248
So it quickly becomes astronomically expensive.
If you double the number of bits n you get
Cost(2n) = $2^(2n - 13)
You were assuming that Cost(32) = Cost(16)^2, in other words Cost(2n) = Cost(n)^2. But this equality doesn't hold:
Cost(n)^2 = $2^(n - 13)^2 = $2^(2n - 26)
This is significantly smaller than Cost(2n) = $2^(2n - 13) as stated above.
An equation with different units on each side like "512 bit = $8" doesn't work mathematically and will lead to contradictory conclusions.