I am also a fan of loose tea. I have a steel mesh ball and chain that doesn't get nearly enough use.
Part of the problem is my perception of the price. I know it is not more expensive by weight than bagged stuff is without the bag factored in, but when you throw down twenty dollars and end up with a handful of product it's considerably demotivating. The fact that such a handful can be distributed into a huge amount of cups is not really at the front of your mind when you visually assess your purchase.
I can walk to a place that sells it in 2oz quantities for as little as $4, depending on variety. Depending on type, it can make anywhere from 10 to 30 cups. The other place near me only sells it in 1/2 lb bags, so I don't buy nearly as much from them since that can be 15-20.