The question should be the other way around. Dedicated servers are not cheap per-se, they're just being sold at the market price.
The question should be, why is AWS so expensive on all fronts (not just the hardware but also bandwidth)? And the answer is again because the market lets them get away with it.
The question should be, why is AWS so expensive on all fronts (not just the hardware but also bandwidth)? And the answer is again because the market lets them get away with it.