There are good arguments on both sides to this. And some good points already have been made here. Some things to consider, there are some people out there who make cheap stuff and are out to do one thing, make a buck, or pound whatever the case. But there are also other great people who know what they are doing, and can do it well. You have to take into account, not only what a piece of cloth, or starting material would cost, but also the tools needed to bring something together. Lets say a sewing machine, a good sewing machine will cost you good money, and just one machine don't do it all. There are other machines you need to do embroidery, and to do Segre seems (seems that don't pull apart). You also need the room to lay these projects out. And many times when you buy stock, you have to buy in some bulk, not just one piece. For that you need to lay out money up front. Now, what about a persons time, what is that worth? I know I wouldn't want to put a garment together and have it take me 4 hours work, and get maybe $2 an hour for it. There are many things that make up that price you see.
All that being said, you also have to be a smart shopper. When you find something you like, look around and see if someone has something like it for less. Get to know who you buy from as well, do some home work on them. Do they sell on ebay, do they have a good rating, do they sell lots of merchandise, check web sites like this one, see if people know of them and if they had good experience with them. Find out if you'll get your money's worth!!!