In the modern era, diamonds are not all that rare or hard to retrieve to begin with, and now we have mass-produced synthetic diamonds that are actually higher-quality (fewer flaws) than mined ones. The idea that a tiny pebble, however artfully cut, is rare and precious and worth thousands of dollars is 100% marketing.
When I was looking at diamond rings the synthetics available to me were at a high cost, not much less than a "traditional" diamond. Same goes for alternate stones such as Moissanite which HackerNews has discussed below. So, not being pro-diamond here, but simply stating it looks like marketing has brought up the prices of these alternate methods too.
Perhaps you were shopping with an unscrupulous jeweler then, because, all else the same, a Moissanite stone is significantly less expensive than a comparable diamond
It is rarer than many minerals, yes, but not enough to justify the astronomical prices. The global diamond supply chain is controlled by a handful of powerful companies that cooperate to maintain scarcity and keep prices high.
The idea that engagement rings "must" have a diamond only dates back to the '40s and is entirely down to De Beers' marketing. The same company spent a fortune promoting the idea that synthetic diamonds are somehow inferior and developing tests to distinguish them, even though they're chemically identical and the only way to tell them apart is that natural diamonds are lower-quality, with more flaws and less clarity.