The same reason Macs are overpriced: The overall build-quality and their uniqueness justifies it. "Run-of-the-mill" products like most Android phones are always going to be cheaper. Also, Android/WP7 royalties do not even begin to compare to the tons of money Nokia put into the development of Harmattan.

Screen size is not a plus for the Galaxy S2 by the way. The challenge in phones is not to make them bigger, but to make them smaller. The N9 probably has the better screen-to-surface ratio, and fits more comfortably into one hand.

If you prefer a bigger device, that's a matter of preference, not quality.