Why spend 5k on a watch when you can buy a watch for 5 pounds?
Why spend 25k on a car when you can get half decent car for 2.5k?
Why spend 600k on a house when a 250k house will do?
You get some idiots on here spending a fortune on clothes with labels attached. If he enjoys pens, he enjoys pens. Each to their own.
With things such as cars and houses, the difference in price regularly exhibits itself in the way of quality or size.
If one house costs 3x much as another, it's generally because there is a valid reason for that.
Location, size, finishing and over all quality as well as the amount of land that comes with it.
As for a car, your example wasn't that accurate in my opinion, it should be more compared to the likes of a Ferrari because they're up in the realm of diminishing returns.
Okay it's a super car and can go really fast, but I personally find them ugly and horribly overpriced and find no reason why they cost hundereds of percent more than adequate cars that still maintain some luxury.