I couldn't see it being around $200, as even a decent frame for prescription glasses will run you several hundred dollars, I could see Glass being around $500 when all is said and done.
I'm pretty sure prescription frames are just really overpriced due to a semi-monopoly in the market. Depending on your prescription there are online retailers that actually give you your first pair for free. The most expensive bits in Glass is probably the optics/electronics.
I concur, but for a different reason: I think Google want this to be a "premium" product, in the same way the iPad has maintained its status in the tablet world.
Google are starting to recognise that merely having lots of users isn't necessarily as interesting or profitable as having slightly fewer that are of a higher value.