As others have said, they went for game balance over realism. The system makes it really easy to balance where combat should be at certain levels with to hit and damage output vs AC and HP.
The only thing I would add is, as with anything Paizo does, they say if the RAW are not your thing just do your own thing. If you want to do a system where you say: divide the cost of everything above level 1 by 10 and add an artificial "reputation/connections" points they have to get to get access to higher level weapons, then feel free.
They went for a system that is easy for them to balance player power vs enemies to keep things in a certain range. If you dont like it, I would try to figure out a way to adjust it to make it more realistic to your liking while trying to keep the same sense of balance. Of course changing the way the economy, weapon damage/unique weapons, and other things you described is largely rewriting the entire combat/economy systems so if you go there then godspeed.