The prices aren't really outrageous. The problem is that each item comes individually, so paying $2.xx shipping per item when it comes from a different store isn't going to raise their profits much, if not the opposite. It's nothing like eBay shipping charge padding.
Also, last time I ordered 3 blu-rays from them during a similar promo, and one of them got cancelled. I contacted them, and they refunded money for one blu-ray, making the 2 I got B1G1. They do have pretty good customer service.
So yes, shipping kills it on some stuff, but it's really not them being evil; it's just their system is set up to not use a warehouse.
(And I spent $160 total on 12 games again, sigh)