My kids love LEGOs, but I do find them on the expensive side for small pieces of plastic.
They are only expensive if you don't compare them to other "similar" small pieces of plastic. There are several companies that make Lego-like bricks, but the fit of these knock-offs is pathetic. The tolerances of the manufacturing processes that the Lego Group uses is tighter than just about any other industrial process you'll see, and they quite literally will last for decades. I have Lego that I had as a child, that my girls used when they were growing up. They still work fine now 30 years later. About the only problem I've had with older bricks is that the clear ones turn yellow with age. It's a common failing amongst plastics, and I'm not really going to yell at Lego about it. If everything were made as well as Lego, the world would be a different place.
See #4 - they may be expensive, but they are a good investment. I bought a train set for $120. I can now sell that set for $300-400 on ebay.