Many flight costs are not directly tied with distance. Landing fees, the cost of supporting the plane on the ground, the cost of all the collateral business operating costs (booking, etc.) all are independent of the length of flight. In addition, the most costly portions of a flight are the take off and landing, not the time spent flying midair.

Transcons represent pretty much the longest flights you can take in the US (baring to Alaska or Hawaii), so you notice the effect the most. From Boston, we have some pretty good fares when based on CPM, especially to the North West and Florida, where you also factor in competition.

However, when you compare that to other options, AND factor in things such as seat comfort, limitations on movement, luggage, etc, you find it really isn't that great. The trade off is that flying provides the only currently available option that can get you there in a reasonable amount of time. IIf you were to run the rail lines like you do airlines, I bet you would find that airfares look terribly expensive.