At the beginning of Japan’s home video industry, niche media (including anime) was often expected to only sell relatively few copies, and mostly to video rental stores. These stores pay a premium for their merchandise, as they’re expected to make that money back in rental fees over time. As a result, home video anime ended up costing a lot more than other media, as nobody anticipated a collector market for such niche entertainment.

Otaku, however, proved them wrong. Not only did they want to own anime on home video, they wanted it so badly that they were willing to buy them at the high “video rental store” prices.

And it stuck. Since otaku will buy the stuff anyway, there was no reason to lower the price. In fact, lowering the price was experimented with, but only resulted in less revenue overall, as the lower price didn’t entice people who previously weren’t buying anime to buy anime.