Is it possible that the market for software developers is larger than the fpga developer market hence allowing tool development costs to be amortized over a larger set of users.
That's true, but that doesn't explain why the HDL IDEs lack modern productivity features or why the simulator GUIs have the same interface as 20 years ago. Inertia and vendor lock-in are better explanations IMHO.
I hope with FPGAs becoming more mainstream the open source/hobbyist community will step in and refine some things, but if the big EDA shops don't take hints from the software industry things are not going to change very fast.
Most software tools are provided for free, sometimes even open source. If money is involved, and we're not talking about things like IDA Pro, prices are usually negligible.
With Xilinx toolchains, you're paying both for extremely expensive toolchain licenses, and paying quite steep prices for the FPGA units themselves. We're basically shoveling money at Xilinx as fast as we can.
