Stern could certainly do this game for less than the 8K, but part of the price would be based on how much profit Gary wants and what Scott wants. But no doubt they could drive the cost of the BOM down significantly as well as assembly costs.
The fact that Scott could not get 100 people to drop $8K does not mean there is not a market for it at that price. Scott was facing a few major challenges. First off the, pre-pay model was already on life support by the time he took this to market. And even though it was a fully working prototype, there was no demonstrated ability to get get them built, which was certainly a big concern for some. Lets be honest, if Kevin could have gotten Predator built in a timely manner, that whole thing probably would not have blown up on him. Getting machines built is tough, just getting all the needed parts is a bitch. In reality Kevin's plan was not that different then what you guys did to build the four Woolys', it would have to just been doing that for a year to get them done.
Second, there is certainly an expectation now that a game for $8K is going to have RGB LEDs and to some, they expect a color display, without those, some would just not be willing to cross to that price point, so that was going to be a limit to the market at that price but at $6500, I don't think that is nearly the same issue.
Third, it is not very easy to market a boutique game and Scott obviously felt there was a limited window to generate sufficient interest to move forward. While pinside will spread the word, it represents just a small portion of the pin community. Getting greater visibility via shows etc would help, but the reality is the cost of doing that, would not necessarily get the needed results, without potentially wiping out any profit. Any other meaningfully form of marketing would also take a reasonable amount of capital, and with such razor thin margins, very hard to absorb that and not lose money on the project.
I have total respect for Scott that he was not willing to risk losing money in pursuit of getting these made. He crunched the numbers, and he saw what needed to happen to make it work, and the numbers just did not add up (something that jpop obviously never bothered to do).