It's because most people don't have a point of reference for web development costs, and their experience with web products is with applications that have been around for a couple years with millions (or tens or hundreds of millions) of dollars of development time put into them. Facebook, Twitter, Square, Basecamp, etc.

When someone walks into a $5 million dollar home they instantly know it's an expensive home not because they're aware of the materials and craft that went into building the house. It's because they have a point of reference, their home, for what something costs and they're able to extrapolate an approximate cost for something far more expensive.

People don't have this point of reference for web development because most people haven't ever hired someone to build a web app for them before, and most people have never tried to build a web app on their own.

A tip: Ask people for a few sites that they like and that they use. Take a look at them and approximate how much time it would take you and your team to get that application built from scratch.

Then say - okay to build an approximate version of X, you'd probably be looking at a team of 3-4 people (or 6-8, etc.) working full time for X months.

So that site likely would cost around X dollars for you to build.

The point isn't to get them to understand our craft and the effort involved.

This exercise helps give them a point of reference for how much the things they use every day cost, and from there they can start being realistic about what they can get within their budget.