People are just not price sensitive to most things. It’s also seen as bad to be thrifty, most people think of you as being cheap or stingy. Everything is about appearances now, people are more worried about what other people think than their own interests.
Companies have also figured out that they can make more profit by raising prices and shipping less product. They have to pay less in overhead and wages and get the same amount of money.
Legally, you’re allowed to make copies of games that you own and use them in an emulator. You can download mods, play multiplayer across the Internet when servers get shut down and also take advantage of better hardware and get better resolution and framerates, then there are quality of life improvements like savestates.