What are the features that make a DSLR costlier?
For example, I am wondering why the Nikon D700 costs $2000?
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The Nikon D700 has a full-frame (FX) sensor. Such sensors are inherently more expensive than APS-C (DX) sensors, due in part to the relatively lower yield from chip manufacturing.
In addition, the D700 is a "pro-grade" body, featuring alloy chassis, multiple controls, and AI-lens metering capability. Compared to a D300s for example, which has similar features, the premium is basically all in the sensor.
There's a significant extra cost to manufacture the sensor as gerikson states (with 2.25 times the area the chances of a defect is much higher so they have to throw more chips away per wafer due to defects).
But there's another factor to consider and that is that D700s cost more because people are willing to pay more! It's the same everywhere you look, the premium models cost a disproportionate amount. The extra money is used to subsidize the entry level models whose sales figures are far more price sensitive.
Because professionals and ambitious amateurs (especially ambitious amateurs!) will pay for it. That is the sole reason why. You don't need an expensive camera to take good pictures; in fact, there is almost certainly no photography application for which you couldn't use a cheaper camera.
By contrast, there are many applications that would be better (or more conveniently) served by large or medium format cameras, which are even more expensive.