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Who buys very expensive locomotives ($500 +)
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Yes, brass pieces are expensive and always have commanded a premium amount. I have two brass locos, both under $500.00 at purchase time. I was making considerably more money at the time I purchased them, than I make now. Something your not considering is that brass can be an investment which can appreciate in value over time. This is certainly the case with "crown" brass pieces. Crown pieces are the top of the line a brass producer produces and are made on a limited run bases. Even lower grade brass pieces hold their value, so when it is time to cash out of the hobby, a considerable chunk of change will be returned to the owner. This is something which will likely never happen with any plastic models. Brass has it's place in this hobby and maybe what I've said above will help you understand why.
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