I get that part, Salty. Mexico is the same way. When I went down there (been a while back), a steak dinner was 24 pesos which was less than three dollars then. The current exchange rate is one peso = 0.065557 USD, so it would be even cheaper if the price was the same.
Exchange rates makes things seem out of proportion a lot of the time. That, coupled with the different costs depending on where you are, can really skew things. The tuition for the university I posted earlier runs around $5632 per semester, which is around 4000 GBP.