I've purchased five different Cocobolo guitars in the past 10 years, of which three are still in the collection. None of them were cheap, but neither were they outrageous in price. From my perspective, Coco commands the price it does because...:
1. Aesthetics -- Cocobolo has an eye catching color and grain pattern that grabs the attention of anyone interested in wood (ie., acoustic guitarists). It is a flamboyant red sequined evening gown compared to the basic black business suit that is EIR. This is what initially drew me to the wood in 2002.
2. Tone -- Cocobolo's tone is a wonderfully complex amalgamation of bell-like overtones, nice tight bass response and just enough midrange push to cut through the din of a full house. Paired with a Sitka or Engelmann top, Cocobolo absolutely sings - Regardless of body shape or size. In fact, my #1 recording guitar is a custom 2002 814c with Cocobolo and Sitka. It's so easy to mic and just sits perfectly in the mix with very little effort. I can't say that about my EIR guitars. Cocobolo may be a beautiful wood, but it's the tone that keeps it in my herd and gets used regularly.
3. Relatively Uncommon & Difficult to work with - As Taylor fans, I think we are a bit spoiled by the ready availability of Cocobolo as a tonewood. I may be wrong, but I don't recall seeing a Coco build from any of the other big name players in the acoustic world (Martin, Gibson, Guild, Takemine, etc.). This says a lot about the difficulty in, or unwillingness to, deal with the idiosyncrasies of the wood on a larger scale by these builders. I remember talking to Bob about a Cocobolo/Redwood build I wanted to do in early 2004. At that time they were still struggling a bit with the "Crack-o-bolo" issue. He mentioned that they were experimenting with making the backs and sides thinner than standard EIR and were having success with it. Although it wasn't standard practice at the time, he wanted to try it on my build. I went with his suggestions and the guitar turned out fantastic with zero stability problems.
At the end of the day, I think the advantages of Cocobolo far outweigh any additional costs the use of it may incur. Then again, I am cuckoo for Cocobolo...