Prices are not too bad - it just depends on what components you currently have. 6700XT to 7700XT is a solid upgrade for a single gen, but 6800XT to 7800XT is basically 0%. We could call it stagnation, but anyone using a 3080 or 6800XT or higher doesn't need to upgrade this gen (unless they go 4090). People on 10/20 series NV, or 400/500/5000 AMD will see a 2x-5x increase just with the 7700XT. On the CPU side, Zen 3 AM4 is still fine for damn near everything (especially with a 5800X3D). On the Intel side the same for the 12/13000 series, but even 10000 and 11000 series users don't need to upgrade yet. The DDR5 bandwidth advantage is starting to show more clearly, but it's still not required unless you need every FPS. PCIE5 GPUs are nonexistent (and not needed) and Gen 5 NVMe drives are of little-to-no benefit in real-world usage, having worse random performance than good gen 4 drives. Be wary of chasing benchmarks - most reviews use either a 7800X3D or 13900K for GPU benchmarks and a 4090 for CPU benchmarks.
Being smart about when to buy helps too. AM5 launch pricing was high in regards to the total platform, but now there are reasonable mobo and DDR5 RAM deals. Or buy new stuff early in the life cycle and resell your existing pieces while they are still relevant. AMD typically has some strong game bundles too - I recently got The Last of Us, Jedi Survivor, and Starfield for the last three components I bought. Not useful to me, but for anyone planning to buy one of these games it's a nice discount.
CPU and GPU prices have pushed higher but that was to be expected. Even so, they still aren't too bad. I think I paid $300 for my 2700k and $400 for my 4790K - these were halo CPUs at the time and while not halo tier anymore, $300-$400 gets one plenty of CPU grunt today (5800X and 13600KF are under $300). Resources, manufacturing, and transportation/shipping simply cost more today, and the biggest issue is that CPUs and GPUs are competing for limited manufacturing capacity with Apple (who pays top dollar) and other cell manufactures and now AI cards. Memory and storage are still fairly cheap, and one can find decent cases, peripherals, CPU coolers, and fans for cheap too. Even the OS can be cheap (free).
AI is the biggest worry - Nvidia would rather use silicon for a $25,000+ AI accelerator than for 10 $500 gaming GPUs. The only thing keeping their prices "reasonable" is AMD and now Intel (which looks to be through the worst of their issues and their next GPU (Battlemage) should launch with decent drivers). AMD would make the same decision but they don't have the market share yet on their AI cards and likely never will. Intel is at least trying to expand their manufacturing to their former glory days which should help increase supply in the coming years.
I think frame gen (DLSS3/FSR3) is concerning, as NV and AMD might try to pair it as required with future, cut-down GPUs (while saving full dies for higher profit AI cards or halo products). I worry NV's 5000 series will have a clear split with the 5050/60 and lower basically requiring frame gen. 6000 series will push that to 6060/70 and lower, until the only option will be all gaming/consumer cards will require it while the pro-sumer/halo card(s) won't.