You will not likely reach an answer that is acceptable considering you are judging a single component against a group of components, and more importantly, you are impliedly using an "apples to apples" comparison.
The Alto was designed to be used almost exclusively with the K Store (I say almost because it will also act as a BR/DVD Player). In addition to what has been stated above, the Premiere line has much more flexibility in supporting multiple displays within a home, and as pointed out, storage capability is almost unlimited. It also works with physical discs, so not tied to the limited Store content (although the Store is growing). The user interface also provides additional functions not found in the Alto, albeit not a significant difference).
That said, I think the main reason for the price differences is simple capitalistic pressures. They created a unique user interface that brought something to a specific market. That market, for the most part, consisted of financially well-healed individuals willing to pay the price K was asking to obtain a simple method for storing and accessing their movie and music collections. K priced at levels the target market would accept, as we tend to do in business. The only folks questioning the pricing were those that couldn't afford to pay what K asking, or for personal reasons decided their util value system would not accept the cost.
The pricing you see today for a Premier system, while less expensive than the early days, still places a high value on the IP created when the company was formed, and as long as there is a market willing to pay the asking price for that IP, the pricing structure will likely remain the same.
Jim