I remember talking to a Lycoming rep years ago, and I got a similar reply as to why the engines are so out of sight, even factoring in low production numbers and better quality raw materials. A lot of it is liability. I'm not sure if Lycoming was outright buying policies on the motors, or just charging X more and holding on to it as a lawsuit reserve.

I do know about 18 years ago, I looked at making aftermarket swingarms for Motocross bikes, as I had made a few custom ones for me and friends, and one off orders.

The liability insurance alone made it so I would have had to triple the price, or move 1,000 units a year to make a modest profit, like 15%.