Originally posted by Smolk ...these prices do not seem high if the dollar was roughly equivalent to what it is now.
This is where inflation calculators come in. Going from 1986 US dollars to 2010 US dollars, you roughly double the price.
Inflation Calculator: Bureau of Labor Statistics
$640 for the body in 1986 comes to approximately $1277.68 in 2010. A basic kit (Body, 75mm lens, 120 insert) using those 1986 numbers comes to $879 before taxes and shipping, or roughly $1754.82 in 2010.
Living in Canada, I usually ignore differences in exchange rates and local pricing trends for items originally priced in US dollars when I calculate inflation. My local Canadian dollar prices could well have been 50% or more higher than the US $ price depending on the year, even though the Canadian and US dollars are hovering around par right now.