The price has come down in the last few years. I know an aerospace engineer that was part of a team that designed and built a cruise missle posing as college students. At one point they needed assistance calculating some ballistics and posted their problem on Usenet. They received a response from an Australian professor who later stated he did nothing wrong as the answer could be found in an publically available textbook.
I think they had a $10,000 budget for the project.
The US military is getting in on this to some extent. They are funding the Affordable Weapons System program to the tune of 26 million dollars in an effort to develope a cheap cruise missile built with off the shelf components for about 50,000 a pop. The AWS will have a 600 nautical mile range and a 200 pound payload so it’s roughly comparable in price to this guy’s project when you consider the increase in capability. I’m not at all surprised that it’s possible to build a limited one for 5,000 in material costs.