Actually it started when MLB was granted certain preferences that no other business can get, by the government. As long as it is a 'closed club' and exempt from several federal statutes it isn't a 'free market' buisness.
The fact that Yankee and Sox fans love their teams whereas other fans couldn't care less is also life
Whether the Yank's or Sox fans love their teams more or less than say Milwaukee wouldn't make a damn bit of difference, as the market in NY is so much larger the two teams could never be on equal footing.
Smaller market teams like the Cardinals, Marlins, Twins and Royals used to win when they had good farm systems and good veteran players
Therin lies the problem... veteran players. The smaller market teams cannot keep them, as the larger market teams buy them at very high cost. The odds of winning with a very young team are extremely low.
Also to consider, you can get seats at a game in smaller markets but in markets where there is pressure to win like in Boston or New York, ownership will turn to whoever can pay the tab
You lumped the Marlins into 'small markets', the last I heard the greater Miami area was huge. I used to travel to Miami on a monthly basis. I could walk up and get tickets at ProPlayer 5 rows behind home plate any time I wanted. You will have to have very good connections to get a seat like that in Stl.
So to end my screed, if the Yankee fans like the fact that Steinbrenner can purchase all of the good players, fine. Your kids can watch the Yankees play themselves when all of the others are run out of the market.
The Twins also used to draw 3 million fans a year when they were winning world series rings.
The Yankees are just plain stupid with their dealings. They sign guys who are over 30 to long term contracts that are back ended. They gave RJ a two year extension and he's clearly on the downside, they picked up Jarret Wright who was a bad pitch from a lost season and they took on Kevin Brown who was past his prime.
Baseball is a business. There are also too many teams out there with bad business models and no fan support. Anyone can draft good guys, develop the talent and keep a guy for 7 years. If you think that he's asking too much you either trade him for younger guys or you let him go and get some draft picks.
By the way, baseball is not a huge attraction in FL. Too hot to watch games and too many other things to do down there.