I'm a small gamer compaired to you John but I know the feeling you're talking about.It's really depressing knowing that someone is willing to pay a freekin lot of money for a lame bag cause of a brand on it and is not willing to pay half the price for a real handmade project,that is unique and life lasting, out of the hands of a craftsman.And about competitors that get a better price for a product that is more or less worse one can only wonder "how on earth that other guy convinces people to pay him that much when I feel guilty mentioning my prices?"
I'm a bookbinder.I face the exact same thing you're talking about everyday....The market here is full of bookbinders that do lousy job and get fair prices and bookbinders that do mediocre job and get huge prices for their work.Their books will not last over a decade of good use,they even look worse, yet they somehow make their prices seem reasonable.I would never lower my quality but not having to see the long face when I mention the cost would improve my mood a lot.Why is it so hard to understand that a book that has been taken apart,repaired,resewn,leathercovered,handdyed and decorated and will outlast you and probably your children has to cost more than a couple of pizzas and some beer?I could go like this all day long,point is it's the same problem everywhere.
Anyway,all the people I ever met and do quality work,whatever their field may be,underprice their work.They all have competitors that achieve better prices for worse products(good for them of course if they can do so).They all get "mugged" by resellers that take benefit out of their work and most of them have given up on this kind of deals.
The most annoying thing about this whole case is that there is no answer!Just as mentioned above the only relief one can get is by thinking "I know what I make is good and that I pour my heart and sweat into it".I feel the same way as you do,only in a very very very very smaller scale probably!
Oh,and funny thing,I went to a head doctor for some personal issues and in time he became the most understanding and loyal customer!What are the odds of that?!?