Wow. Lots to digest here.
First, cost of development does not dictate price of a product. The market does. Any company that is pricing their goods based on a cost plus model is doomed to go out of business (you don't really think it costs Microsoft >$200.00 for that little cardboard box do you?).
Second, lets talk about market (that absolutely does matter).
The major competitors in and around the player's competitive landscape are the Fractal FM3 {$850}, Helix Stomp HX {$650}, and XL {$700}.
I would argue that THESE products and their pricing is why Kemper is charging too much for the Player upgrades.
Now, even the FM3 can't do 10 slots (8FX+Amp+Cab), so none of this is exactly apples to apples ..... but I don't think your average consumer is going to be this informed when they make their buying decision. What they will see is an FM3 with a screen, and LCD scribble strips for all 3 buttons compared to the Kemper Player. I would argue that this is a tough sell (although you might get some people that see the expensive Kemper as "premium" and buy it simply because it IS more expensive than the others).
Another thing to keep in mind is that it is always advantageous to price a product higher at launch and then lower the price later. No one is going to complain if you lower the price. The opposite ..... not so much. I suspect, in the future, pricing will come down.
Having said this, Kemper has now eliminated one of my key complaints with the Player. With level 2 and especially level 3, I can use a Player as a backup and throw go rig. I wasn't even expecting level 3.