Neither is appearing in Australian Court when some customer decides to sue you, or the Australian government decides to pull you through some local knot hole of product liability that is over the top when compared to what is required in the US.

Because of different Taxing regulations, the software may have sold for that much higher if it was developed in Australia,

As for the strength of the Australian dollar, that is purely a rubbish argument, because US companies typically price their software in US dollars, and let the exchange rate take care of itself.

$1600 more sounds like over kill, (depending on what percentage of list price it was). However, because of different Taxing regulations, the software may have sold for that much higher if it was developed in Australia, and the software manufacturers may be responsible for such tax difference. Australia has a GST tax [wikipedia.org]. Just figuring out if you are liable for this will cost you a bundle. Collecting it and dealing with it from Chicago will cost you more in terms of staff time, and hiring work done in Australia.

It could easily be that the cost of doing business for high end software could amount to a pile of money.

Wrong train of thought. Australian import duties are quite low for most goods (alcohol and tobacco are exceptions). For the most part all you really need to do is pay 10% tax on a container load of goods.

But the problem goes way beyond. I ordered a camera lens from B&H in the USA. I paid $70 shipping. It was over $1000 so I paid 10% tax ($180), it arrived on the weekend so I got a double whamy of a customs good holding fee $50, and for some reason UPS charged me again for the privilege of customs delays $30. I paid a total of $300 to get this over the listed USA price and the end result was it was still $250 cheaper than the cheapest price I could find anywhere in Australia.

ebay thing? For that the problem is Australia Post. I received a faulty product from America. USPS shipping was $7 to get this thing slightly larger then a letter over here. The company asked to ship it back and I went to the local post office. Our post office said it was slightly too thick to be a letter, no matter we'll send it to the USA for $55. !!!!!!! My father is CEO of a direct marketing company here. They have some 10000 subscribers in the USA and they have worked out it is cheaper to get the letters printed in Germany and bulk shipped to Hungary where they get inserted into envelopes and sent via Hungarian Post to the USA than it is to print them themselves and ship them direct to the USA. Can't do it internal to the USA unfortunately due to some rules about the contents of the mailings.

This is Australia. Everything is upside down here remember? We enjoy getting raped in the wallet here mate.

At least australia wont send you to gitmo or send some fake FBI to arrest you with false warrants.

You really haven't been following the anti-association law stuff recently havent you?

In numerous states now, if you so much as talk to an outlaw biker you can get done for serious time, and in most the cases what designates an outlaw organization is not decided by judicial review but the whims of the police minister. Theres nothing in the language of the laws that says they cant declare an unpoular political group, like socialists, or activist group, like the sea shephards (Ok granted sea shephard is very popular in australia, just not with the government) to be an illegal organization and thus imprison people simply because they want to organize around their beliefs.

Our political masters have been taking notes from abroad, and its not looking good.

and what I came up with is that bandwidth and rackspace in Australia are much more expensive than other parts of the world

Which is unfortunately irrelevant because Blizzards "Oceanic" servers are all in racks in the USA.

But I get the feeling Blizzard don't have battle.net servers in Australia

There's been articles about the servers being in the USA, (can't remember where and the first page of google only shows complaints on forums), but either way a quick ping will show you that wherever they are there is half a world's length of wire and fibre between your net connection in Australia and where their servers are.

However Blizzard are just one of many that is price gouging by location. Apple used to be so bad at it that people could fly from Sydney to Hawaii to buy a laptop, spend a weeks holiday, fly back, and still have change left over from what they would have paid to buy it locally. That may be hardware with real shipping costs but the real shipping costs would be a tiny percentage of the markup.