We seem to have this discussion every couple of months or so.
"The hobby is dying, nobody builds kits, younger people aren't coming in, yada yada yada.... " No it isn't. I belong to a large club. We have plenty of younger members, most who have joined in the last couple of years. At my LHS, I see plenty of younger people in the train section. The hobby isn't dying, but it is changing.
"Everything is so expensive now, younger people can't afford it, retired people can't afford it." SOME young people and SOME retired people can't, however the average model railroader is between 50 and 60 years old. This group is typically at their peak earning years, and has disposable income. They drive the market. It should also be noted that the higher end stuff, Genesis, Tangent, Rapido, Scale Trains Rivet Counter, etc. aren't your only choices. There is lower cost stuff out there, not to mention a huge second hand, as well as a thriving "New Old Stock" market.
The new highly detailed stuff is so expensive! Yep, it is, however these manufacturers are only providing what the market wants. The market decided it wanted highly detailed prototypically accurate models a long time ago. The market also decided it wanted more RTR. Not so much because people don't want to build any more, but probably because of less hobby time. Let's face it, it takes more hours of work to make a living these days than it did in 1960. I tend to buy common items like rolling stock RTR, and weather it up, and save my kit building time for special items I can't get any other way. I have to budget my hobby time just like my money.
On the pre-order system: No there is no deliberate under producing. No disrespect intended, but this is the perception of someone who doesn't understand how the business works. If you're trying to sell something, the idea is to sell as many as possible and maximize profit, agreed? No sensible businessman would deliberately under produce. Can you imagine this conversation: Sales Director: "Hey Board of Directors, we can sell 10 million of these widgets and make $4 million. Instead let's make 5 million and cut our profit in half. Great idea, right?" BOD to Sales Director: "You're Fired!" But seriously, how to determine that? Build too few and you leave money on the table. Build too many and you're stuck with what doesn't sell. The preorder system gauges market interest. If there are enough preorders, they do the project, build what gets pre-ordered plus maybe a few more. Remember that as a manufacturer, you take these pre-orders, have the models built and before they leave the dock in China, you pay for them up front. You don't see any money until they are sold, so you're bearing the risk. If at the end of the process, there are a couple thousand models sitting on your shelves, well, there goes your profit! You have to blow out the surplus at a substantial discount, maybe break even or worse, take a loss. Guess wrong enough times and you're out of business! The brass manufacturers have been doing it this way for decades.
Tichy, Westerfield, et al pricing stable? Pretty much, but then how many new product announcements have you seen from Tichy? They're making their money selling stuff that has been around for years. Their tooling is paid for. Westerfield? A resin kit manufacturer, like all resin kit manufacturers, a small family owned business. Probably not an apples to apples comparison with Horizon Hobby or Scale Trains, but still... resin kits are in the 45-50 buck range each, less trucks and couplers, and have been for years. You're paying the same or more than for a top line RTR freight car. Great stuff, but they make specialty items and cater to a subset of a fairly small market. The last pair of resin kits I bought cost me right at $100.
I think the bottom line is: These high priced models are selling. Selling out. If the average age of the typical model railroader, or more important, the spending power declines, then the market will react and we'll see a shift to more less expensive offerings.
I can't afford a Ferrari, a Lambo, or a Rolls either, so I don't sweat how much they cost. There are still plenty of Chevys, Fords, Toyotas and Hondas out there, not to mention all of those used cars!
My $.02