I asked this question myself once. I was told: Supply and Demand.
There aren't that many deaf people, per se. At least not at my level. (I require amplification at 120db in the "low to mid range frequencies with no high frequency capability", so yes, I'm essentially deaf.)
My current BTE pair cost me $2400 EACH. I was given a $1,000 discount as a repeat buyer, so I still paid $4000 for a pair in 2007... $1200 would be cheap.
I'm not really happy with the digital quality, either. These aren't high end in detail or capability, only high end in amplification. (Phonak Supero +).
Since the purchase, I've completely lost hearing in my left ear... furthering the monetary wastage. I should get, maybe, another hearing aid for my right ear next year... Will obviously go Analog as the price on a single analog in my range is only $650.
Taken into perspective: my hearing began to fade around 1980. The first pair of BTE's my parents bought cost $1,000 each (analog, obviously)... so this is not a sudden thing. Hearing Aids have always been very expensive, and are almost NEVER covered in any fashion by health insurance. YET... Health Insurance would have paid for a full dual Cochlear implantation that costs over $50,000 (except Cochlear implants do nothing when your auditory nerve is toast). THAT is even more ridiculous IMHO.