Industrial demand for diamonds is not what's keeping gem quality stones high.. you are definately dreaming on this one. If it were your diamond tipped blades would be far more pricey than they are.
Diamonds, even gem quality diamonds are not remotely RARE.. they are high priced because a consortium has managed to rather effectively create a world wide control on the supply of them.
Industrial use of diamonds is not remotely driving gem quality prices.
I don't doubt some of what you say.
However, just as cutting industry likes diamonds because they're tough (never mind electronics liking them), so do jewel connoisseurs. It's pretty nice that your stone is highly unlikely to crack or chip, ever. That makes it highly *desirable* in many circles. High demand can create high prices. All those circles liking diamonds is alot of demand!