I would be a lot more willing to accept the inflation argument if salaries at these companies were going up at inflation rates too.
In this case though we all know they are not and additionally digital releases not needing to be physically transported and the lack of printed manuals in physical games, for instance, also cuts down on what it costs to make and ship a game today.
One of my favorite things about what you are saying is modern transistor gates are smaller than microscope resolution at the time. Even if they could recognize an integrated circuit it would be another 10-20 years before they could even start to reverse engineer it.