Players definitely go down in price if they aren't delivering. Look at Chelsea, I don't think I've ever known a season where they don't have any players priced over £7.5m.
Ozil, Martial, Mata, Kane, Coleman etc have all been considerably more expensive in the past.
It would be boring as hell if they increased the budget, one of the things I dislike about the Sun Dream Team was it was basically 'too easy' to get a good team packed full of stars, the whole point of FPL is looking for ways to exploit value. I'd actually like to play a variant with a tighter budget say £95m so you really feel the squeeze.
Players that were 'bargains' one year are obviously not going to be a bargain the next season. Sometimes you have to wait a year for them to drop back down and see if you still want to take a punt on them.
Aside from the usual hunt for players you think are cheap there is a bit of mileage in researching if any £4m defenders are going to be starting for their teams, e.g. I went with Wan-Bissaka last year.