A Few Points
Be careful playing with numbers. Although the numbers Jason and Phil are quoting are correct, they are not the whole story. The $480 price is a LIST price not what the cars actually sold for. There was a 50% mark-up at the hobby shop and then and as now, the kits sold for much less than list.
Also, then as now, there were many sponsorships that trickled down and helped many race for less. I recently bought a new, in the box, top-of-line 1/8th scale 4wd car for around 60% of list.
The point is list price is pretty much meaningless except in a few cases, unfortunately, Motonica, WRC, and the other Classic Pan cars seem to be on the high side when it comes to prices, at least at the present time. Some of this is undoubtedly the import situation, but since most of the cars available in all classes of RC are imported there must be more to it.....
Another point is that 1/8th on-road seems to be pretty much the least popular class at this time. Off-road is obviously Number 1 and doing very well all over the country. Many other classes are doing much better than 1/8th on-road.
As has been mentioned, this has been discussed many times on this thread and the reasons are many, finding a place for a track, no R-T-R cars for "instant gratification", noise, fewer "mechanics", cost, etc. As I see it the lack of entry level cars and racing tracks not being in the public eye are the main problems.
Look at it this way, if cars in other classes can sell for the very low prices that they do today, so could the 1/8th on-road cars. Since the interest is low, the price is high. The insistence that the cars must be the "state-of-the-art" and "the F1 of RC" (even the new Classic Pans are much more complex than needed IMHO!) hurts more than it helps.