ISO claims that the revenues from standards are required to finance the work of the technical working groups producing them, and the overhead costs. It also claims that this financing helps to keep the standards "as neutral as possible", avoiding to rely solely on goodwill of some big corporation.
Analysis of the arguments
There must be some truth in these arguments: ISO is a non-profit organization (as are the national standardization bodies that adhere to ISO), so the prime objective is not to generate profits but to cover costs (and be able to cope with risks).
According to its annual report of 2015, ISO has organized almost 2500 meetings in the year, coordinated the work of 3500 technical bodies, and produced 940 000 pages of documents (translated in several languages). All this clearly ain't for free: either it is to be paid by those benefiting from the standard (us, through the purchase of documents) or it has to be financed via taxes (so in the end, again us, but via the IRS - and then you'd pay also indirectly for a lots of standards you're absolutely not interested in).
We can see in the financial statement that about CHF 2 millions (approximately USD 2 millions) were earned as operating result in 2015. Considering a revenue of 38 millions, we could hence estimate that the prices could be 5% lower. But the sales are not always as many as in 2015 (2014 it was about half of it). So overall it's not that the documents are unduly overcharged.
I share your concerns about the hidden costs of expensive standards.
Many people are not fully aware of the standards and produce lower quality. In addition, the standards are often sold with a single user licensed, meaning that a company would have to buy a huge amount to be allowed to distribute the knowledge to all its employees. And $250+ seems expensive compared to a K&R is sold at $50.
But on the other side, it should be seen as part of the production costs of good software. If you need to fuel a truck, you buy expensive fuel. So if you need a standard to produce quality products, just buy the standard.
What really upsets me, is that the paper standard (which has to be printed, stored, manipulated and shipped) has the same high cost than the electronic PDF, while the latter has a much lower production cost. I think this should really change, in order to increase efficiency of standard bodies.
The open-std platform
On the first page of the N1570 draft that you provide as link, there is a a clear "(c) ISO/IEC" copyright statement. This certainly explains ISO's claim.
But in the foreword, you can read:
The Working Group responsible for this standard (WG 14) maintains a site on the World Wide Web at http://www.open-std.org/JTC1/SC22/WG14/ containing additional information relevant to this standard such as a Rationale for many of the decisions made during its preparation and a log of Defect Reports and Responses
I'm not a lawyer, and this is only a personal opinion: I think these documents are available for years on this platform (sponsored by a university) despite ISO's claim because it's probably in a grey zone, the discussion about successive revision of wordings in draft standards being part of the rationale conducting to the final standard.