I don't think the "Supply and Demand" mantra is answering the real question. The answer to "Why are prices so high when the materials are so scarce?' is obvious.
I could be wrong, but based on "Looks like S-E didn't anticipate some things" I'm guessing OP is going for "Why is SE still designing new gear acquisition this way?" For example, why not offer all these materials at an NPC like GEO spells? Why the scarce supply and demand thing altogether?
Three guesses:
Classic FFXI Early Adoption Trick
Whether people like it or not, it's been the MO in this MMO for a decade. There was a break for a while, but it's been back full swing lately. This held a level of exhilaration for me for a few years, but nowhere near that now. Nevertheless, I 80% expected it for GEO AF.
This is GEO's only AF
It's pretty good, yeah? I just took a quick peek. Add up all the time you spent on AF1, AF2, AF3 for another job and GEO is probably better off here, even for the next few weeks, honestly.
Balance with other mage jobs
Is Arise still 10M? Phalanx? Meteor? Does Alex still require completion of all TOAU missions? We can probably bicker exact balance here, but I honestly felt I got off easy with GEO requirements so far. To this day I still have no idea how my SCH nabbed Embrava and Kaustra from a 3 minute trip back in time.
Personally, I'd have preferred the SCH style approach to GEO. But I still maintain that grind and uncertainty is where XI has returned and is going to stay, whereas XIV will be the more casual option. And I say that as a casual who is leaving for ARR in a week. I'll work on the GEO bedpan next year.
Incidentally, quests for level ~50 AF pieces in ARR were recently announced to be soloable.