I think everyone has their own calculations. Maybe they are getting their materials cheaper than you are or pricing their labour lower. I make lined bags from vinyl and sell them at a lower price than you do (sometimes, depends on how long the job takes - especially for custom orders), but it is probably because the vinyl I purchase comes at a lower price, and my labour is only $10/hr), NOT because I'm trying undercut anyone as I sell mostly to shops (I gave up on the online storefront when I got a f/t job).
Obviously they are selling at a price they are comfortable with and, especially when starting out and building a name for yourself, it is normal to cut prices until you build a stronger demand. I think that by insinuating that all crafters who aren't selling at prices in your range are trying to ruin you and other crafters, you are insulting them. If they feel that their good are worth more, they will charge more. I don't think anyone who looks at crafting as a serious business would undercut themselves to a point that would be detrimental.
If you think your prices are too high, try to find the same materials at a lower cost. If you think they are reasonable, leave them as they are. If someone likes your product, they will pay for it regardless of the price.