Have you ever organised an event Dave? I do and it ain't cheap. I'm actually wondering if you are being deliberately provocative....
. I'll answer your questions/points.
1. No, running events are becoming more common - the problem for small scale events is that there are now so many large events which attract large numbers of runnners that the smaller events struggle to survive -just finding a date which doesn't clash with another event within 40 miles on the same day is becoming increasingly difficult. Unless you are on the far north coast of Scotland where there isn't a problem...... 
2. Your point about medal/goody bag - well Dave, for every one who feels as you do there is another runner who wants a decent goody bag/medal. You don't have to take one and newer runners are encouraged by them. Our goody bags cost us little, in return for putting the advertising blurb in the bag we get free samples to put in. On the water issue, I agree - we use cups but TBH on a marathon/half I prefer to have a 500ml water bottle to carry with me. Again that is my personal preference - just as yours is not to have this.
3. higher fees for OTD entry - well, we need more volunteers to handle this. Volunteers are not easy to come by to help organise an event. But the main reason is that we like to know how many are likely to turn up at the event so really the cheaper entry is an incentive to help us out. We like to know roughly how many will turn up. An extra £2 - £3 or so OTD surely isn't too much to ask (though I know pre-entries for big events can be quite a bit cheaper). But the incentive is there for you to pre-enter.
4. People these days have come to expect a certain level of slickness at events...... we want people to return year after year to our events. And they do. So we must be doing something right! Hidden costs of putting on events is not always apparent. Start/Finish gantries/banners, chip timing, toilets, donations to volunteer organisations, paying for the course measurer to come up and measure the course, PA systems, sweep vehicles, numbers/pins, trophies, tiger tape, water, t shirts, website/pre entry on line, - its endless.
However, there are races that cost virtually nothing....... take a look at the FRA website. Fell races happen throughout the year all over the country and generally cost £2 - £5 to enter. There are no medals, goody bags, facilities etc. etc. They are brilliant - just running in the raw! Its the road races that cost and while you are not alone in your opinion on cost - there are others who really enjoy the rigmarole of a full blown road event with all the trimmings (else why do we keep completely selling out well before the event dates?).