Frustrated by new hard drives failing one after another while most of the 2001-2004 models are still running? There are many possible explanations but I figured this one would be the simplest, and as good as any...
Newer, more advanced designs require more development. That means higher costs. Since it is not sustainable for the market to grow with those costs, the result should be higher prices. Unfortunately, most consumers aren't willing to pay said prices, so the manufacturers end up skimping on development (and we all know how that turns out - see the IBM Deskstar 75GXP and Seagate Barracuda 7200.11). If HDDs were still built with the same quality as they were in 2003, they would have higher prices, not lower.
It's a basic truth that few people are willing to accept. I know some of the consumer advocates in the world are going to hate me for saying this, but in the long run, we would have been much better off paying the price.