For those that don't see where the inexpensive games have gone, you should check out Print and Play games.
Many designers have released their games as Print and Play as a precursor to a Kickstarter (getting the design right before making the game with the expensive bits).
Cheapass games is still around but it's harder to find their games that required players to buy most of the components separately. They did release their more popular games with more deluxe components.
As for the profit margins on the games, both the designers and the store owners are usually making profit margins in the teens as the components for these expensive games are still pretty expensive. There have been many posts on various forums (Boardgamegeek and Reddit are where I usually see them) detailing how few people are getting rich as a board game designer