Something like this at the 1k price point isn't profitable? If you've never done anything like this before, I can see it being daunting. However, if you'd never done something like this before, you'd be crazy to start here.
When learning anything new you do a 'hello world' version of something. Bicycles have training wheels. Electronics has starter projects as well. You work up to something like this. Being thrown into the deep end is not the best way to learn how to swim. Eventually though, you get comfortable that project like this are not daunting.
You get your stacks of PCBs, you get all of the interconnect wires, you get all of the LEDs, you get all of your tools, then you just draw the rest of the fucking owl. I would not be looking forward to making 5000 of these, but I would not be afraid of 100. It won't be done in a week, but by the time I got to 100, I'd be pretty good at it. Again, if you know you're making 100, then the added time of making the proper jig is well worth it.
Also, isn't this something that Kickstarter would be perfect for?
Oke so let's to with a bit of napkin math. First materials:
3d printed enclosure: $167.68 (unlikely to get a better price for quantities a hobbyist will self assemble)
PCB for controller + parts, it's not listed in the article but let's assume it's 25$.
PCB for the LED panels + parts. Let's also assume 25$.
So now we are already at $213.68. Then let's factor in labor. Someone who can create something like this would not struggle with asking $100 per hour. I dare say assembling the entire thing, correcting possible errors, testing boxing + shipping will take more then 6 hours. Only placing the LED's will take a significant amount of time.
So no I don't think it's profitable to sell this for $1000.
For $167.68 per 3D print at 100 copies, you'd easily be better off buying the 3D printer and doing the printing yourself for much cheaper. So yes, a hobbiest could get better prices. It is DIY after all.
What's labor intensive about it? Mass producing and assembling PCBs is very cheap. A Chinese manufacturer will make you an injection mold for $2000 and then you can produce thousands of plastic parts for almost nothing.
I think the mistake you are making is that the processes that make 1000 units are completely different to making one unit ten times. The design gets streamlined for manufacturing. Nobody is going to hand solder wires to fix a botched PCB layout 1000 times. You'll just redesign the PCB layout and try again.
Did you miss something? This entire thread is PRECISELY about NOT using mass production capabilities, as in a hobbyist builds a few of them. My point earlier was that it can be profitable if you do use mass production facilities.