A lot of people may love a shelter dog as much as one from a breeder but as they are "second hand" dogs don't think they should pay as much. On top of that a lot of the time they are middle aged so you really only get half as much "use" out of them.
I don't mind private rescues charging a bit more than the larger, funded ones as the private rescuers have to pay for a lot of things out of their own pocket.
However, yes it does deter a lot of people, it's a bit like buying a car. Would you pay the same for a 1991 model Mazda now, as you would 20 years ago?
Of course not, the car has a lot of miles on it and the parts may be starting to fail. You don't know how the previous owner drove it... they could have been sitting on the limiter the whole time.
But there are some people out there who really want that model of car, don't care about the miles and are willing to pay the money to get the exact car they want.