Given the availability of 32-bit ARM processors for $1 too (in volume), I don't think you should be too surprised. In the microcontroller world, it is often very hard to read a datasheet and then guess the real volume price of a chip. The magnificent chip may be dirt-cheap while the anonymous chip without speed or features may have you chip for air when you hear the price.

When designing hardware commercially, it is always a good idea to contact a couple of distributors and have them help you. That reduces the risk of selecting a processor on the way out of production. But the distributors (together with the application engineers from the different manufacturers) can do a great job focusing down on the most suitable chips from their lineup. They can also help suggesting good reference designs, and availability of good sample software. And at the same time, you may establish a personal relation with some of their application engineers, which may come in handy at a later stage in case you for some reason get into troubles. Remember that the cheapest chips are almost always the most recently released (new designs in smaller geometries reduces the production costs) so there may be errors or missing information in the datasheets requiring you to ask for clarifications or work-arounds.

If you have two or three candidate processors, you can then do own research about what other people think about the processor, the supplier, the manufacturer, the suggested tools, ...

In the end, there may be 1000 possible processors out there. It takes huge amounts of time to scan all possibilities. Each application engineer can possibly help doing a 100:1 reduction of the original problem, so it really is helpful to get external - and free :) - help sifting through the alternatives.