Building it with mil-spec parts can legitimately raise the cost. Generally, components have a higher failure rate early in their life, then that failure rate goes down, and eventually goes back up. Mil-spec components are the ones which survive the early failure rate curve, so you're paying for that component, plus the others which didn't survive, plus the initial wear-in process itself.
Now, the $1000 price point on this seems somewhat high, but is difficult to judge without more specific specs on what's in it.
I know that many fire departments and other first responders are very severely constrained by budgets. There's lots of interesting things out there, but they just don't have budget for gizmos which cost multiple tens of thousands of dollars. A $1000 price point seems much more feasible. Though if you throw this into a burning building, I wonder if it would survive to be used again.
Cameras are crazy cheap, less than a buck. Lenses may be expensive to design, but you might find something off the shelf to do what you need.
The expensive pieces probably go, in rough order: Case and mounting hardware, radio, reasonable quality sensors, embedded processor and support chips, power supply. Don't know where the cameras fit into that, since you want a bunch of them.
If you can't get a COGS under $200 you don't deserve to be in business.
I'd assume that these would end up being re-usable in many circumstances, though certainly not all.
It sounds like they still need to figure out the durability issue -- but at that point it could be re-usable in some cases I'd think (does seem like they'd figure out durability first though).
Generally it goes Consumer, Industrial, Automotive, Medical and then Military Grade when it comes to chips. Differences can include higher heat tolerances or additional fail safes, such as additional watch dog timers, etc.
Now, the $1000 price point on this seems somewhat high, but is difficult to judge without more specific specs on what's in it.