I agree that modifications should be made far easier to implement, and in fact the FAA does make it a lot easier than the CAA especially for minor mods like fitting a nonstandard instrument or an additional landing light.
Regarding high cost of stuff, the cost of certification or cost of product liability insurance are frequently given as explanations for the high cost of something.
Usually this is almost total nonsense. Avionics for example is a very slow moving market (compared with anywhere else where similar technology is involved), with most products having a 10 year run and some (about 3/4 of my panel probably) having been almost unchanged for 20 years, judging from the dates in the manuals. You recoup the cert cost in the first year and then you milk it for all you can. That's why you can buy a £300 PDA with a much better display than a £10,000 MFD.
No, the real reason why stuff is so expensive is that most of the players in this market are big traditionally managed firms, with big traditional overheads, lots of middle management, lots of real wa****s too, but they supply a relatively small market.
In addition, very few talented people will stay in such a firm for more than a year or two. I bet there is almost nobody really bright at e.g. Lycoming today. If there was somebody with more than half a brain at Cessna or Piper, what would they be doing?? Cutting out big rectangular holes in instrument panels so they can bolt in a big GPS? The level of excitement and challenge must be zero.
This results in poor design, plenty of warranty work, some made public through SBs and ADs, a lot of it covered up, and this keeps up the costs too. For example, brand new aircraft electrics are of the standard of a Vauxhall Viva.
How it got there i.e. why the market isn't served by smaller more efficient firms, is a good question. The experimental market is, and look at the stuff that's available. An autopilot which does everything mine does, 1/10 of the price. And wonderful high performance aircraft designs.
Ultimately, if you set up a regulatory agency, their jobs and pensions depend on them regulating (whether required or not), so what should we expect?