One must understand the reasoning behind the cost. Since the company built the software from the ground up, there is a huge initial investment cost. Microsoft Office 365 is nothing more than just Microsoft Office 2010 and newer. All previous variants of Microsoft Office and new are re-hashes with updates to the UI and backend, so the initial investment costs have already been paid off and the remaining investment costs are very little for every iteration.

So in other words, eventually this software will become much cheaper in the future with every new iteration. Since it is a 1 year subscription, you are not tied down. I know for instance at the company I work for (one of the largest companies in the world), paid roughly $300USD per 3 licenses.

It is true as some say that if some functions are gone, then why is it so much more expensive? Well, it is due to the investments needed. They could have used the code from Libre Office and get similar results and significant reduction in investments, but I suppose this is a method to move towards similar direction that IBM did with their office suite. Once it takes off, I imagine the prices will drastically be reduced by the next iteration. If the company feels that it isn’t making its earnings from this through poor sales due to cost, I imagine there will be a price decrease to compensate.