Yes, I suppose. These are the 'retail' prices though. With Car audio equipment, you seldom pay this. You could even go refurbed or used (craigslist, ebay, etc) for even cheaper. You can also not get the 516 (I linked this one just as example) and get the 514 or 512 (previous years model, almost identical) for much, much cheaper. Say $3-400.
You can get a refurbed (which I did, actually) KNA-G510 navigation module (MADE BY GARMIN!!) for $200 shipped on eBay, right now. If I hadn't known I bought it refurbed, I would've assumed it was new. Used it for about 2? years now, not one issue.
You don't have to have an iPod connector or bluetooth, either. But if you wanted, you can pick up the iPod adapter on eBay again, for about $8 for an offbrand one, or 15$ for the official Kenwood one.
Bluetooth adapter is a bit tricky, can't seem to find a price lower then 100$ anywhere. But hey, we shouldn't include that price because your headunit is also bluetooth ready, and you have to buy an adapter for the same price (about $130). Apples to apples.
Traffic is not available on the G510 navigation module, only G610. But in my experience with other GPS units, in my city, (metro detroit), it sucked. Inaccurate is the key word that comes to mine. Although in a few years this will probably change and it'll be a realiable asset. A drawback I guess.
Expensive yes, but worth it too. That was the MSRP too of everything. If you say $400 for headunit, $200 for nav, and 20$ for iPod, that's only $620.
You paid about $380 for this. There are positives and negatives to each. You can take your GPS to another car, or anywhere. You can't with a built in in-dash (I have an iPhone with TomTom on it, so that was a deciding factor). You get a 7" screen vs a 5" screen. No traffic on the indash, but traffic on the portable.
The biggest deciding factor to me, and it seems that the OP has in common, is that it is all integrated in the car. I turn the key and the screen pops out with a nice 7" display for selecting songs/artists/playlists by touch(!!) with my ipod, and all touch controls with a big screen for my Garmin navigation. I don't have to worry about suction cup mounts, power cords going into the cigarette lighter, etc. My brother had a standalone Garmin and left it on his windshield, someone broke in and stole it! Now he has to take it down every time he leaves the car. Just convenience. I paid about 250$ more for mine, and I'd do it again in a heartbeat. Different needs, different wants. That's all. I love having my headunit foldaway when I turn my car off and having EVERYTHING hidden in my car.
I've made my case in the above. It's more like $200-300, and you can update maps, firmware, etc from the unit. I'd also argue that my in-dash is a better headunit then your Alpine, as well. Not that the Alpine isn't a good unit.
It's a fair point. There are many benefits over a standalone GPS vs an integrated one. But your price point which you base your entire argument on isn't fair.