Funny question, really. When will games cost too much? Supply and demand are ever a universal struggle, really. When did games not cost too much for someone?
Personally, a student, I haven't been able to afford every crappy game to come out for quite awhile. Instead, I hold out for the rare gem, and I'm willing to pay a decent box price for that.
Aside from that, I rent - GameFly assures I don't need to buy a console game ever again if I don't want to. GameTap provides more PC games than I could ever finish. The only games I never need to buy are ones that are good and affordable (a $20 gem) or something I've been saving for a long time for (Fallout 3). I finished Mass Effect for the X-Box 360, I'm waiting for it to hit $20 so I'll buy my PC copy.
I've just royally kicked myself out of being a Student any longer, and assuming I can find a job in this recession, methinks I won't be returning to my days of shelling out $50/game/week are over. Its not a matter of games costing too much, it's just a matter of how willing I am to waste my money.