New York Times Exploring how to Charge for Content
As someone in the newspaper archiving business I can tell you that it does cost quite a bit for the newspapers to handle the archiving, storage, and sales of archives online. Add to this that they usually aren't doing it as a feel good service to their readers, but as an additional revenue stream and you find the prices mentioned in the article are about average.
They also have to track usage and somtimes pay royalties to their article sources which is added into the price.
Don't forget that most people looking for older newspaper articles are doing research, not reading the news, and paying a small fee to get the one or two documents they really want doesn't bother them at all.