Development costs went up, but also did reach, likely by a similar magnitude.
But at the same time manufacturing and distribution cost went to almost zero, since most games are sold digitally now. I think this alone compensates for the effects of inflation.
While great games could get away with charging $100, those are exactly the games that don't need to, because they sell tens of millions of copies anyway. And the games that are struggling to recoup their production costs now, would struggle even more if they tried to charge 50% more for the base game.
They might be better off charging less. At the current $70 price point I'm already thinking long and hard what games I spend money on. I'd buy a lot more borderline games south of $50.
I also disagree that charging $100 for games would suddenly end the "need" for live services and microtransactions. Those exist because of greed, not need. That microtransactions were created as a direct consequence of the $60 game price is a myth spun by publishers and industry shills
The games that are successful live services and make a lot of money do so because they are good games to begin with. They'd be profitable even without recurring spending. And what makes them think that a game that can't be profitable on sales, will be able to sustain a large enough player base to make them profitable as live services?
So in the end it still comes down to one thing: Make games great again and the industry will recover on its own. But keep making bad games and the struggle will continue, and no price hike can turn it around. Trying to charge more for worse and worse products is insanity, not a solution.