According to Lord Coe, they had to make about £600 million from ticket sales to cover all costs, so they couldn't make them too cheap. It's also true that general costs of living are much higher than in China, for example, so you would expect tickets to cost quite a lot in London. But whatever way you calculate it, 2012 tickets did cost more in real terms than at any Games in recent history - you can see a comparison here.

Also, there were a huge number of seats offered to corporate sponsors and visiting VIPs - as many as 25% of the total according to some. A lot of these then had to be sold back to the public in a hurry just to fill the stadiums. The reason, when you come down to it, seems to be just old-fashioned greed - the same reason why hotels, venues and airlines massively increased their prices for the Olympic period, and then were surprised when the tourists didn't come.