Who knows...? Could be a combination of all the things already mentioned. Maybe some parts aren't made in-house? Does S&W manufacture the 1-7 and 15 lowers? Notice the M&P 1-7 and 15 appear to be the only models in the lineup that don't have the incorporated trigger guard in the lower.

Maybe part of the price difference is that the 1 in 7 is listed as "Law Enforcment" and marketed to government agencies accordingly with competitors.