Casey,
Yes I agree that those prices will vary widely regionally. NY is one of the most expensive areas and there is not a ton of competition here either. Those FBO's that are here though all charge about the same price. There is a few dollars difference but they are all pretty similair.
If you look at the Florida area that Brian lives in, it is also VERY expensive. I know the other two FBO's on the field at VRB (Sun and Paris Air) charge comparable prices for comparable equipment. I have not flown out of Ft. Lauderdale, but it is considered to be a lot more upscale and therefore probably more expensive than most other parts of the state.
Also, we do not "milk" our students as you put it. I have never given my student's extra training in order to get hours. In fact, I along with the majority of other instructors that I know, get rewards and bonuses for having students pass stage checks and checkrides rather than getting a certain number of hours out of them. Most FBO's have figured out that they make more money by having a good reputation and people spreading good word-of-mouth than by trying to "milk", having students take longer, and many times giving up. If they have a good experience they will usually stay with the FBO, rent more, pursue additional ratings, etc...An extra few hours of "milking" is not worth it.
As far as how long it takes students to get their time, that is up to them. Some fly once a week, some less, some every day. Obviously the more often you do something the better you become at it. A place like FSI allows you to train to full time...they don't offer anything else. Training at your local FBO can very easily become too relaxed...if you let it, leading to more time to get your ratings. Nobody is saying that it can't be done at an FBO, and I do not want to start an academy vs FBO debate, but each person needs to make a decision based upon their own needs, desires, current situations, etc...
I just get a little frustrated when people make blanket statements like "this is the only way" or "the way I did it was better" etc... The correct solution always comes down to what is best for you