It's the ink, not the paper that really costs. Off-the-shelf targets a lot bigger than 8 1/2 x 11 cost less than a nickel each.
Having worked in the Graphic Design and Printing industry for nearly two decades, I can tell you that this is half-way right...
In the printing business, paper is generally considered to be a negligable (read: no impact on final price of job) cost for printing a job. So yeah, paper--to a printer--is essentially "free".
Ink, is only slightly more "expensive"--it's considered an "overhead cost" for the printing business. Stock, standard colors like black, blue, and red are purchased by the case by most printshops, and are always at-hand, so they are figured into costs like other "business consumables" like the coffee in the lunchroom, or the lightbulbs in the ceiling...
Where the VAST majority of cost comes from in a print job is creating the art (typesetting/graphic design/photo prep) and the actual time on the press. So it's essentially the technical expertise of designers, pre-press operators and pressmen that the majority of the cost in ANY print job comes from--whether it's 100 wedding invitations, 10,000 newspapers, or 1 million best seller novels...
Targets are a sort of oddball in the printing business. Since most targets are "oversized" (meaning bigger than 18"x24") printed on crappy paper, and manufactured in relatively small quantities, they are priced sort of high per unit, compared to other similar large-format print jobs like newspapers or wrapping paper.
And also, there are only a small handful of printers in the US that are equipped to print large (life-sized) silhouette targets, so they can pretty much charge what they want.
Hopefully I can get my BIG letterpress up and running in the next few months--then I can print anything I want up to 18"x24", and possibly larger if I get really creative with feeding the paper...