That's really not the bulk of development costs though: The real cost is in labour; as game dev teams have increased the labour costs will increase too. Delay in game? Costs go up.
It's offset by the industry becoming bigger; back then a game selling 100k is a huge success, now it's more like 10 million. At some point that'll cap so that's why the studios area increasing prices now. Oh and if the studio is public, they need to feed the parasites shareholders.
I generally don't buy big games of late so I've not had to put up with super expensive games, but it's just something to keep in mind why prices are so.