It's all about the quantities produced and sold. The lower priced model sells more so it gets the best reduction due to mass production. The next size costs a little more but your production costs increase because you made less units.
This effect conspires and multiplies the chip cost difference so folk unfamiliar with economies of scale would blast makers over the chip cost difference alone.
That's the short reason.
Bob
My brother just dropped $300 on a new cell phone instead of $200 because it had an extra 16GB of memory in it. You can buy the same amount in the form of a MicroSD card for less than $25 on Amazon.

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic