Everyone has a different budget when it comes to R/C racing. What is "expensive" is really in the eye of the buyer. For some, spending $400-600 on an engine is lunch money. For those that don't have that type of budget, anything below $300 is good enough. $300-400 seems like a good range for an above average or modded sub $300 engine.
At the pro-level, Novarossi and Novarossi-based engines seem to be doing really well. The Novarossi 353, Mega MF and MaxPower SL3 engines have beat out the competition at a lot of big events. But no matter how well the engine performs - setup, engine/clutch tuning, driving and finishing still determine who wins the race.
To me, it makes sense for a company to carry different product lines that fit different budgets. There is no need to be budget minded at the expense of performance and only carry budget priced engines. Some people may argue that Novarossi based engines are "overpriced" - but it's hard to argue that point when it beats out the less expensive competition.