Why are electricity generators so expensive?

Are generators really worth $1500? I'm looking around for a semi decent generator and Hondas/Yamahas are thousands of dollars. Even cheap chinese made ones run about $400 or more. Why are they so expensive? I know the engines are pretty simple, is it the motor that creates electricity that's expensive?

General ideas first.
Generators are subject to some of the same emission controls as
automobiles under 40CFR (US Clean Air Act 1990). Very few of the cheapo's are actually
fit for sale. The obstacle to portable generator use (and consequent demand)
is the screaming noise of continuous 3,600rpm operation for 60hz output,
gas guzzling, choking smoke and fumes, difficulty of starting and maintenance,
and many other issues.
The new generation of portable generators produce 2kW in a brief case
size. They generate DC output at a low rpm within max torque band which is inverted
to 120 VAC. They are whisper quiet, and might run 6-8 hours on one gallon
of gasoline. You would have to visit a dealer to believe the performance.
The model pictured below lists at about $1,200 but sells for less.

Any product is worth what people will pay for it. If a certain model of generator was not considered a good investment at $1,500, it wouldn't sell for that much. Portable generators are fairly simple, but in manufactured goods, often the materials and manufacturing is a small part of an industries costs. There's a lot of cost in facility operation, maintenance and marketing. There's also ongoing research and development. Small engines need to be continually improved to meet ever changing air pollution restrictions. Often times, when I have compared the present and former cost of a particular product, and then check the comparative value of money over the same period of time, I find that the current cost of a product using an older technology is actually cheaper than it used to be.

Most dealers sell maybe one per month, so they won't keep them in stock, if they can't double their money.