Volume helps, but volume hasn't increased exponentially to cover cost. Remember that cost also involves risk, and not every game sells insane numbers of copies. Hugely successful games do, but many games simply don't see the kind of sales that offset the investment, which is why so many games are money losers. Look at literally every other entertainment product and service. Increased sales don't not offset increased cost. Prices go up. Video games are really unique in this regard.
It's not naivety though, it's an understanding of the business. No publisher is putting out games out of the goodness of their hearts. They are driven by profits. They are going to find ways to maximize profits. But they are beholden to shareholders. If shareholders don't like the direction of the company (i.e. they are not getting returns on investment) they replace the board and the board replaces the CEO and the company shifts focus to accomodate.