People don't play expensive games? You seen the price of of Xbox and PS3 games? PC games have for years been cheaper than anything on console, i can cite you a very long list regarding that.
While i'd love E4 to go into production with the halting of the Outsider, after all these years i have to admit to being a bit glass half empty on this subject.
The fact that even if it wasn't what we expect due to years of ideas being thrown around, and the fact it would sell a lot of copies, which for a company is all important as it pays the wages, i tend to agree that E4 will never come out. That said, my candle is still burning on this subject although it's getting rather low.
Back to the Outsider, it is a shame if true, but a big project like that in development for so long, thinking from the company's point of view, cancel it now if completion isn't on the horizon, makes financial sense. Why flog a horse if it's not going anywhere? Maybe a little too ambitious from the creators.
I think back to Freelancer and the ideas originally for that before M$ stepped in and dumbed it down for 5yr olds, sad but happens.