Why is it so expensive? It's not using top of the line
    processing, according to leaked specs. It's about as
    powerful as the original Kindle, which cost $159 right
    now. Is miniaturization and a metal headband a $1,341
    cost?

What? It sits on your head, so it has to be small and light. It uses a new kind of display. It's made in low volumes. I suspect the hardware costs are actually more than $1500.