Why the big price increase in S&W revolvers?

The price is strictly based on supply and demand.
The new guns have locks, and few of us want a gun with a lock on it. So, the older models without the locks are highly desired and buyers are willing to pay a premium for guns without it. Also, like a classic car there are limited numbers of well made handguns any more. The best of them are in safes and showrooms of the collector.
The craftsmanship of the older "classic" S&W revolvers is better than any other handgun ever produced. Ask just about anybody that owns a S&W revolver how good is the trigger. You hear something like "It's the best trigger I've ever shot" or "There's no stacking, and it breaks like glass" or "Smooth as Silk"
Those attributes have a cash value.
The high quality of the triggers on the Smith's seriously reduce the extra money spent on custom trigger jobs, or regular gunsmithing services needed, to get the grittiness out of the trigger that many other brands so often have. It also reduces the lost time while your wheelgun is in the shop being worked on or repaired.
All in all our Smiths need less repair time then many other brands. It's uncommon to hear about one of their revolvers going out of time because of their attention to detail in the lockworks.
All the more reason to spend a bit more on a Smith, than on another gun of lesser value.

Currently a brand new 4" Barrel Model 57 revolver in Blued steel is listed at $1089
I just bought one, barely used, for $530 shipped to my FFL.
I'm certain it initially sold for much more than the $500 I paid for it, and somebody took a substantial loss. They sold or traded it to the gun shop, and were certainly paid much less than what I paid.
If you are careful, look closely at what you're looking for you should be able to do quite well.
If the gun is more than 10 years old or so I would expect the street price to be either where it was originally or slightly higher if it remains in 95% condition or better. But that price will be well below the current model pricing new from the factory.
So save up your money, be careful, and spend it wisely. You should be able to get one for a reasonable price based on current market conditions.
If you think S&W revolvers have increased in value too fast, take a look at the pricing of the Colt Police Positive, A Python or a Diamondback. they're well at the top of the list ofr value increases over what they cost initially.
I guess the bottom line is you get what you pay for, and always it costs more to get better quality.

I have a ways to go before obtaining all the revolvers I would like to own from out of the Smith & Wesson models produced prior to about 1980. I see no "new crop" Smith & Wesson revolvers in my future ... unless they are willing to begin making them like the ones I've always admired. Then I'll be happy to spend my money for new ones.

It's curious how marketing changes over time. Once Smith & Wesson sought handgun consumers like me and made their characteristic revolvers which had a lot of appeal. I bought new Smith & Wesson revolvers from time to time back then. Now the company doesn't appear to even want my business as they persist in producing revolvers with several attributes that I particularly don't want. I refuse to buy or own the new ones because of the influence that the older models have on me. The company's own product, made in former times, stands in condemnation of its current efforts. I can better afford quality guns now than I could in back in early adulthood but there's nothing in the catalog that appeals. Shame really.