I personally feel I answered two legitimate questions here.
Why would someone spend more for a smaller engine than a larger engine?
Legal reasons.
Why are smaller engines higher in price than some larger engines?
Manufacture's know legal requirements for mopeds.
The intent was focus on why the cost is what it is; rather than the reason behind it. And why people are willing to spend more for it.
Put simply what a manufacturer is selling you is smallness, weight reduction and in our case legality. For this you are being charged more.