It's entirely due to cost of manufacture (and the result that hard drives are mass market product with a lot of competiton)

Here's a brand new sedan you could buy for under $5k during the same period. https://blog.consumerguide.com/wp-content/uploads/sites/2/20...

The sort of person that could afford to plonk $3k a few megabytes of storage without thinking about it too hard back then wasn't the sort of person that needs a payment plan to afford an iPhone today, it's the sort of person who's never needed to save for a new car.