There are many different things that influence the price of luxuries, and often the benefit you receive from a lux deal turns out to be fairly near to equal what you're paying for it. Here's a checklist to ask to see what's making the price jack up so high:
Is your country big? The bigger your civ, the more benefit is derived from a luxury, and thus the more you will have to pay.
Do you have several luxuries already? The more you have already, the more the next one will cost you, since every one above two adds multiple happy faces in cities with marketplaces.
Have you broken any deals with other civs? They tend to jack up the prices and be more reluctant to accept payment in installments if you've violated RoPs or Alliances or MPPs.
Really, the first two points are the big influences on the price. Players tend to, over time, pull together a large empire and put marketplaces in many of their cities, even when they're not going for a military win, plus they tend to gain control of several luxuries. If you're trying to get the one last lux that you don't have, it WILL cost you your firstborn, because if you get that, every city with a market will get four more happy faces, and over a large and well-developed civ, that can mean HUNDREDS of happy faces for that one lux. THAT is why it's so expensive, and why you often have to trade several luxuries plus gold per turn to get a new one.
There's nothing broken about luxury trading, it's just a bit counter-intuitive. It works for play balance, I guess, but it's a poor correspondence to real-world economics, particularly the concept of diminishing marginal returns. If luxuries were based on a more realistic model, the FIRST luxury you get gains you the most happy faces (provided a marketplace exists), and the number of happy faces added should diminish as you add more luxuries (basically, the way the game works now, only inverted).