Diamond rings cost a lot due to the amount of work (and tools) required to cut diamonds and fit them into jewelry. You're not paying just for the diamond, you're paying for the diamond cutting process, the ring acquisition that'll actually fit the gem, as well as ensuring the ring is composed of robust enough metals to not fall apart upon fitting onto your finger. And then jewelers have to make a profit so that they can spend money later on to expand their business and ensure they can reach more customers. Yeah, rings are not cheap, but consider what they actually cost to make a single engagement ring.
I can roll on down to the gas station right now to get some raw tobacco right now to roll my own budget cigs, and the cost is only slightly less than the actual cigarettes themselves. I'm not a smoker anymore, though - There's a huge difference in expenses between diamond rings and cigs.