Years ago in a hobby electronics magazine there was an article for a "realistic bolier fire simulator" for model steam trains. Using two yellow, one red and one amber LED, plus some simple electronickery, it supposedly flickered and looked like the real thing. Cost under a tenner to make, plus a little extra for a battery if you weren`t going to hook it to the power inside your model train.
So why so expensive? Gotta be the rechargeable power system. If you`ve met a Mathmos Bubble you`ll know how much extra a rechargeable power system can add to a fun novelty. 3 inch silicone glob wiht a few LEDs inside that costs more than a SureFire E2 does. And it doesn`t even pretend to be anything! Just a glowing glob.
I can see where those things might be used - restaurants, etc. No fire risk, no liability issues, totally reusable night after night with no wear and tear.
Maybe in quake-prone areas where gas supplies might get ruptured. The last thing you want is a room full of burning wax things when a gas main fails.....
But still too pricey.